“There are two factors which have caused low domestic demand — Covid and record high prices,” he said. “We expect demand to pick up sharply around Diwali, when we expect normalcy to return in a certain way.”
The overseas rate hit an intraday high of $1975.4 before paring some gains to profit booking.
The July-September quarter tends to see slack demand as rural households use disposable income for farming sector needs. The fourth quarter sees the highest demand coinciding with festivities and weddings.
In the past four years through 2019 India’s annual demand has been 724 tonnes on average but this year’s figure is expected to be lower because of the pandemic impact on the economy and household income levels.
Analysts are forecasting a price of Rs 60-65000 per 10 gm around year end due to fiscal and monetary stimuli by governments and central banks across the world to temper the economic impact of the Covid pandemic.
“The momentum suggests Rs 60,000-62,000 by Diwali,” said Gnanasekar Thiagarajan, director, Commtrendz.
Kishore Narne, associate director, Motilal Oswal Financial Services, who predicted a price of Rs 65000 per 10 gm by end – 2021 said the same could be achieved by the end of the current year.
“Our target doesn’t change, but the timing does,” Narne said.
He also added that producer dehedging globally was adding fuel to the global rally.
