Falling rupee sends gold prices soaring in Surat

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Surat, June 28: The devaluation of the rupee has hit the gold market here, leading to a sharp hike in the price of the metal.

The jewellers believe that the market situation is not favourable at present, as the customers were unwilling to spend due to high prices.

“As dollar’s value is strong, the value of gold there in dollars is reducing. But, if you see the gold prices in India, the prices have risen. The purchasing power of the people has reduced,” Jignesh Shah, a jeweller, said.

He added that the demand for the metal had considerably reduced, though they had not arrived at a situation, where they would incur losses.

“We are not exactly incurring losses, but the demand has reduced. If we export, then we will have losses. Only the demand is low. We hope that the value of the dollar goes down and the situation becomes better,” Shah said.

The fall in the rupee, which hit a record low last week, has sent Indian gold prices soaring despite the weak global trend, limiting imports. The Indian government doubled import duty on gold to 4 percent in March in a bid to curb its bloated current account deficit.

According to media reports, traders in India, are also waiting for the monsoon to pick up, which could boost the income of farmers, who buy more than half of India’s gold. (ANI)