If you ask who controls the gold business in India, the only answer is Gujaratis. In India, bullion market is totally under the control of Gujaratis whether it is in Mumbai or Delhi.
So, Gujaratis refuse to dump gold even when the bullion prices are very high. In the recent past most people shied away from jewellery shops due to the high prices. However, Gujarat witnessed a different trend. Between January and June 2010, gold import in Ahmedabad has shot up to 2.75 times compared to the corresponding period last year.
About 108 tonnes of gold were imported during the first half of the current year, compared to about 39 tonnes in the same period last year. This is an increase of about 175%. Apparently, people in Gujarat still see the precious metal as a good investment avenue.
This kind of quantum jump has been achieved even as the yellow metal witnessed all-time high price of around Rs19,500 per 10 gm during the last six months. Traders, analysts and experts explain this phenomenon by saying that gold purchases were low in the first half of 2009 due to economic slowdown.
Gold buying has bounced back. Between January-June in 2010, gold was traded between Rs16,500 and Rs19,500 per 10 gm. Investors were waiting for right time to buy or invest in gold, as it is giving higher returns than equities and bank deposits at present.
Usually, gold import is maximum in second half of the year, which coincides with many festivals and marriage season. But in the first half this year, gold import was almost 1.75 times higher despite price rise and there being no festivals.
Besides, special jewellery designing is also attracting customers to Gujarat from across the nation.
To add to this, Surat, the diamond headquarters of India, has reported increased demand for its diamonds. According to traders, demand for the sparklers has gone up this year.