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Ban on gold bars to up rupee value

Published: 17th July 2013 10:23 AM  |   Last Updated: 17th July 2013 10:23 AM   |  A+A-

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Gold prices have shot up but city jewellers are unperturbed and are trying to help the government in strengthening the rupee by implementing a ban on sale of gold bars and coins.

“A strong rupee will bring down the prices of gold,” said the director of NAC jewellery, Ananda Ramanujam.

Ramanujam, who is a member of the Gem and Jewellery Federation of India, said the federation will be imposing a ban on the sale of gold bars and coins in the city from next week.

This has been already implemented in a few places in north. We will soon be implementing this in the south so that the rupee can be strengthened, he said. He also said that the rise in gold prices is temporary and it will fall once the rupee strengthens.

“We are hoping the prices will come down once the rupee strengthens against the dollar,” he says.

Interestingly, the rise in global gold prices come in the wake of gold imports declining by 81 per cent. “This is mostly due to traders keeping away from investing in gold due to the government raising import duty and stopping consignment imports,”  says Sarvan Raj, senior manager sales, Kirtilals.

Though, gold imports would have been hit but that did not deter jewelers from buying gold. Many noted jewellers are coming up with offers to buy old gold jewels at the present price with Rs 100 extra.

“This is a temporary phase, the gold prices will come down,” says  Raj. “We expect the gold prices to fall to Rs 2,200 to Rs 2,400 level. It may pick up by Diwali and consolidate after December-January,” he predicted.

India Ratings director Deep N Mukerjee told City Express that the fall in global gold prices was temporary and the rise will continue. “Till there is global uncertainty, the prices of gold will continue to rise,” he said.

Interestingly, the rise or fall in gold has not affected the bigger players as consumers are investing in silver and diamonds. “Now consumers are looking at an alternative medium,” says Raj. “The sales of silver and diamonds are picking up as consumers are now buying silver ornaments and diamonds,” he added.

More from Chennai.

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