Gold touches new high over Rs 40K per 10gm
Breaching a psychological barrier, gold prices in Mumbai touched new high of a little over Rs 40,000 per 10 gm, on Monday, industry players said.
 
"This is indeed an unprecedented high, but lower by at least 20 per cent in US Dollar terms. Presently, it is $1,545 on the Comex, lower that $1,920 in September 2011," expert and former All Indian Gems & Jewellery Federation Chairman Bachhraj Bamalwa told IANS.
 
According to Bamalwa, if the current global political crises and the trade wars continue to escalate, then the gold prices may shoot up further, crossing Rs 41,000 per 10 gms in the next few months.
 
However, he said optimistically that despite the zooming prices, demand for gold may be marginally affected, around 10 per cent or so, as the wedding and festival seasons begin next month, which are incomplete without gold in India.
 
"Instead of fresh purchases, people may opt for recycling of old gold, at least up to 25 per cent, in view of the higher prices," Bamalwa said.
 
Seconding this, Mumbai Jewellers' Federation President Rakesh Shetty said the incidence of recycling of old gold is actually as high as 70 per cent and sales have declined by over 65 per cent.
 
"People simply prefer to bring in their old gold and pay the making charges for their needs as the current rates are too high. If the current global crises continue, then we expect it to cross Rs 41,000/10 gram by Diwali, which is not a healthy sign for the industry," Shetty told IANS.
 
India consumes an average of 700-800 tonne of the yellow precious metal annually, said Bamalwa.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    V ganesan

    1 year ago

    Time and again gold rewarded Indian house holds.no scams no promoter fraud.no knowledge required.

    Dip in gold prices spurs demand on Akshya Tritiya
    "Akshya Tritiya", considered an auspicious day for buying gold in India, saw healthy buying of the yellow metal this year as lower prices increased footfalls in traditional markets like Ahmedabad, Mumbai and Delhi.
     
    Irrespective of market conditions, gold prices normally increases during the auspicious buying period of Akshya Tritiya. However, global developments this year have pushed down the prices, with the precious metal being almost 10 per cent cheaper this year as compared to the same period last year.
     
    "On this day of Akshaya Tritiya, we are seeing healthy double-digit growth as compared to last year. We are looking at healthy gold and diamond jewellery sales in the next few hours till the end of the day's closing," said Sandeep Kulhalli, Sr. Vice President-Retail and Marketing, Tanishq.
     
    Buyers were seen interested in light, fashionable and trendy items, said a jeweller in Ahmedabad. Gold with 24 carrot purity was priced at Rs 31,700 per 10 gram plus GST in Ahmedabad during the afternoon session. Gold with 22 carrot purity traded at Rs 31,100 per 10 gram plus GST.
     
    "The festive sentiment amongst both trade and consumers appears to be stronger this year. A favourable price offers a good seasonal opportunity for wedding purchases, which underpin Indian jewellery demand. Various trade offers and promotions point towards an increase in demand for both jewellery as well as investment products like coins and bars," said Somasundaram P.R., Managing Director, India, World Gold Council.
     
    "Although a nascent trend, digital gold buying platforms are quite upbeat at this time as they continue to grow at a fast rate, offering consumers the option of purchasing pure gold for as little as one rupee on their smartphone and at their convenience. In spite of the elections, all the indicators point towards a good buying season this Akshaya Tritiya in comparison to the previous year."
     
    By late afternoon, at Multi Commodity Exchange (MCX), gold contract expiring in June was at Rs 31,562 per 10 gram, one rupee down from the last closing. In the international market, June expiring contract of gold on the comex was at $1,281.15 per ounce, $2.65 dollar per ounce down from the last session.
     
    According to analysts, prices of the yellow metal are poised to rally amid rising uncertainties as the US President Donald Trump, despite repeated claims by the White House that trade talks with Beijing were progressing, said on Twitter last Sunday that he would increase tariffs on $200 billion of Chinese goods from 10 per cent to 25 per cent.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Homebuyers get rights equal to banks, FIs, to recover dues from bankrupt builder
    In a welcome move for homebuyers, the Union Cabinet has reportedly approved amendments to the Insolvency and Bankruptcy Code (IBC) allowing the status of financial creditors to homebuyers. This status means a homebuyer, who had paid money for buying property in a project that has been stalled by insolvency, will have equal rights with other creditors like banks and institutional lenders, making it easier for her to recover her money.
     
    "This is a great news for homebuyers," says Ramesh Nair, Chief Executive and Country Head, JLL India, adding, "Previously, if any realty firm went through bankruptcy, the priority of recovering dues from the project was first given to financial creditors such as banks and institutions, followed by operational creditors such as vendors and employees. Homebuyers were widely regarded as merely consumers and did not specifically fall under the liquidation claim waterfall, placing them at a disadvantageous position and exposing them to significant risk upon investment in under-construction projects."
     
    The Union Cabinet, during its previous discussion, had expressed concerns about homebuyers not being involved in the insolvency process like creditors and were also not allowed to initiate the insolvency process. The Cabinet went on to examine the peculiarity of the Indian real estate sector where the delay in completion of under construction apartments had become a common phenomenon. It recognised that amounts raised under homebuyer contracts are significant and contribute to the financing of construction of an asset in the future, thus categorising them as secured financial creditors.
     
    In the current financing landscape, majority delinquent real estate assets are either restructured or taken over by new sponsors and subsequently refinanced - especially when the project is structured as a special purpose vehicle. Therefore, it is only in cases where the developer is under extreme financial duress that financial institutions are likely to proceed under the IBC. 
     
    Following the Cabinet ordinance, homebuyers will share equal priority, in terms of default waterfall, with lenders, in case of bankruptcy-led liquidation. Accordingly, homebuyers will be part of the Committee of Creditors that approves a resolution plan and their voting rights will be in line with their advances or money paid to the builder or developer.
     
    India Ratings and Research (Ind-Ra), however, feels that the final contours of the code needs to be seen for smooth functioning of the committee, considering several homebuyers and voting rights. "This will strengthen home buyers' right and power in case of bankruptcy of the developer and any default in payment or planned schedule. It may strengthen real estate buyers' (end-customers) protection and boost the customer sentiment," it added.
     
    As operational creditors, homebuyers' interests are not fully optimised up till now, as opposed to other operational creditors in other business under the ambit of IBC. With the proposed revision, homebuyers will be equally treated with financial lenders in the liquidation proceeds of the defaulting builder. 
     
    However, Ind-Ra feels this could negatively impact lenders since recovery proceeds will now have another layer of distribution, which was not factored in at the time of origination of loan to the developer. This would effectively increase the realised haircuts for the financers. In other words, without changes in probability of default, loss given default (LGD) could increase for the financiers. 
     
    "On the contrary, home buyers could recover some portion of their dues in case the builder defaults as against the current scenario where buyers have to depend on the residual value after financial creditors are paid, which entails higher hair-cuts. We believe end-users' propensity to initiate case under the IBC would be much lower than investors', considering the end-use and emotional attachment with the property for the former," the ratings agency added.
     
    Echoing similar sentiments, Anuj Puri, Chairman - ANAROCK Property Consultants, says, it needs to be seen how the resolution mechanism for claiming the dues actually falls in place for the concerned homebuyers. He said, "In fact, to be truly relevant, the entire implementation process needs to be clarified to homebuyers. They need to know how exactly they will be represented in the creditors' committee - in other words, whether the National Company Law Tribunal (NCLT) will appoint a resolution professional to represent their rights and interests."
     
    "That said, this amendment will certainly go a considerable way in bringing more transparency into the overall funding of projects across the country. With homebuyers now getting the opportunity to claim their dues from builders, there is an even stronger burden on developers to deliver on time. We will now see builders become more cautious while taking funds from financial institutions and banks, as they would now also be accountable to homebuyers as well as the financial institutions if their business goes belly-up," Mr Puri added.
     
    Ind-Ra sees this move of granting creditor's status to homebuyers as positive for housing financiers over the long term. It says, "Besides home buyers, the ordinance will benefit housing financing companies' asset quality, especially developer-led originations, though with a lag. Housing finance companies, though not a direct beneficiary of the policy change, could get some comfort as buyers' (home loan taker) rights over a defaulting builder and cash flows on liquidation will enhance. Eventually, with increasing customer confidence there will be more takers for home loans, benefiting housing financiers."
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    COMMENTS

    Pandurang Karpe

    2 years ago

    Really this action by Govt. should have taken long back. Now it is ok Home buyers interest is safeguarded ......

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