Mumbai, Apr 16 (): Gold in the early trade continued to fall further and recorded a Rs 1000 fall for 10 gms. More fall in price will touch Rs 26,000.
Doomsday predictions say that gold would touch Rs 20, 000. Gold traders however say there are enough precautions taken by RBI with regard to gold loan, jewellery and ETF. These companies had anticipated the fall but were not geared for such a fast fall.
Concerns are raised about the ability to get the customer to redeem the pledged yellow metal. The affected Muthoot Finance says that an effective mechanism is in force. Personal calls to customers about the dates for interest payment and due date for redemption of gold coupled with a monthly collection report were filed by the branches. The stock value in gold loan and jewellery companies including Titan Industries continue to fall.
A new trouble came up for Manappuram Finance when PE (Private Equity) investors have asked the company to stop operating chit schemes from their offices. Indian Equity Partners and Baring Private Equity Partners have barred the company owned Kochi based Nandakumar.
KPMG survey initiated by these PE investors across 3000 branches in India came up with the report that 5% of the branches were also collecting money for the company’s chit scheme.
India’s yellow metal, gold import bill in April this year will be lesser by 25% than the figures of April 2012. India had imported about 71 tonne gold in the same period last year. With prices sliding down, the importers will not import fearing a further drop.
If the price rises, only the importers buy to beat the price rise. Last year, the gold imports dipped by 12% due to increase in import duties. Yet another reason was the yellow metal jewellers went on a strike due to some provisions in the budget that were against their craftsmen.
In the Jan-March this year, yellow metal imports stood at 250 tonnes. Last year, in the same period it was 207 tonnes. This time however the demand despite a fall is not as calculated.
The Akshaya Tritiya is coming and usually customers flock to buy gold. Buying gold on this day is considered auspicious. The wedding season starting in India is also expected to boost up gold sales.