MUMBAI (CommodityOnline.com) -- Every Indian loves to possess a little bit of gold; but an overheated gold market going crazy to record prices has put jewellers and bullion traders in a tizzy.
A day after gold prices soared to record highs of nearly Rs 13,000 per gram, leading jewellers and traders said the number of people coming to buy gold has drastically come down these days.
The glittering yellow metal continued its upward journey in India with a price tag of Rs 12,850 per 10 gram on the bullion market here on Tuesday.
Trading activity gathered momentum following reports of the precious metal's surge to an all-time high of $991 dollars an ounce last night and also on sustained buying by stockists sparked by a firm global trend amid surge in domestic demand due to the ongoing marriage season.
"Yes, the gold market is overheated. We are getting lesser number of customers these days because people do not have the courage to buy gold at this price," said Sony Joseph, a salesman at Joy Alukkas, a leading jewellery chain in India.
Traders said a large number of people are coming to the gold showrooms to sell gold, and not to buy the yellow metal.
"Yes. For many, this is the right time to sell gold. They are making huge profits out of every gram of gold," said Praveen Mehta, a gold trader in Mumbai.
He said a number of customers have been cashing in their gold holdings amid soaring prices, while others have been using their old gold to pay for new purchases for weddings.
India is the largest consumer of gold in the world. In the last few years, the import of gold years has been in the range of 700-800 tonnes per annum.
Traders said demand for gold was low on Tuesday with prices close to all-time highs drawing a steady stream of profit takers to the market.
Globally, gold prices have eased slightly after hitting an all-time high of $989.30 an ounce the previous day on strong inflows from funds seeking to diversify from worrisome equity and currency markets.
Expectations of an interest rate cut in the U.S. has weakened the dollar and fuelled gold, as analysts say the two have an inverse relationship because they compete for investments. Analysts said the falling U.S. dollar coupled with the rising crude oil prices, mainly raised the inflation concerns and boosted demand for gold as a safe haven.
They said melting stock markets shifted part of their funds in the bullion considering it safe for investment. The Bombay Stock Exchange benchmark Sensex tumbled over 1500 points in last four trading sessions.
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