Gold Prices Soar, Spark ETF Investment Boom

Swift Summary

• gold prices in India hit record highs, crossing Rs 1 lakh/10gm earlier this april and hovering between Rs 94,000-95,000 per 10 gm on Akshaya Tritiya.
• demand for gold jewelry was subdued despite offers like slashed making charges by jewellers and rate protection schemes by firms like Malabar Group.
• Approximately 20 tonnes of gold worth Rs 18,000 crore were sold nationwide during Akshaya Tritiya; the Mumbai market contributed an estimated Rs 2,350 crore worth of sales.
• Consumer interest shifted towards lightweight gold jewellery, silver items, and diamond pieces as more economical alternatives due to high prices.
• Gold exchange-traded funds (ETFs) saw important traction: ETFs worth Rs 340 crore traded on NSE and nearly Rs 30 crore on BSE.
• Jeweller sentiment indicates buisness volumes were about 30% lower compared to last year but remained intact in terms of value due to the higher price points.

!Record high gold prices hit buyers but ETFs find favour

Indian Opinion Analysis
The surge in gold prices had a dual effect: it restrained traditional jewellery purchases but concurrently encouraged investment-oriented buying like ETFs as consumers sought newer ways to hedge against inflationary pressures. Tho jewellers attempted various incentives and discounts to revive demand on akshaya Tritiya-a customary day for buying precious metals-high costs likely deterred middle-class households from significant spending. The shift towards alternative or smaller-ticket items reflects pragmatism amidst economic uncertainty.

The robust ETF activity highlights evolving investment trends among Indians who are increasingly leveraging digital platforms for asset diversification during volatile times.This diversification may point toward long-term changes in how Indians approach wealth creation via precious metals versus traditional physical purchases.

Jewellery retailers face challenges balancing price volatility with consumer affordability while maintaining profitability-an issue that may persist if the metal’s cost continues upward trends.

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