As Diwali approaches, the record price of gold and silver would seem to be a deterrent for mahurat buyers. However, the says it is witnessing an overwhelming demand. So much so that gold and silver coins and bars are in short supply. The five-day festival of Diwali begins at Dhanteras Oct 18.

On Monday, silver accelerated to a record Rs 1,75,325 per kg while gold soared to Rs 1,24,155 per 10gm, excluding making charges and GST.

"Demand has outstripped supply. Jewellers are facing a waiting period of up to one week to procure silver from suppliers," said Dadar goldsmith Prakash Jain. "An acquaintance wanted 5kg silver but was told the delivery might not happen in time."

Surendra Mehta, national secretary, IBJA (India Bullion and Jewellers Association), said, "We expect record sale this Diwali in terms of volume as well as value due to FOMO (Fear of Missing Out) of the consumer and investor both. While jewellery sale is likely to be hit by 25% in comparison to last year due to higher prices, the sale of coins and bars could compensate. The sale of lightweight and low-carat jewellery is likely to pick up. We are seeing a surge in exchange of old jewellery for new and this could continue till prices settle down."

Kanaya Kakad, joint treasurer, IBJA, said, "Smart customers have already booked bullion through corporates before Dhanteras. Across India, big corporates like Tanishq, Kalyan and Malabar Jewellers have transacted up to 1,000-1,500kg each of bullion by announcing a fixed price. In fact there is such a shortage. Coins weighing 5-10gm are not available—there is a long waiting period. Silver, in particular, is faring extremely well."

Kakad said jewellery has marginal demand and maximum sale is under the bullion category. "The upward trend is continuing owing to geopolitical reasons and international factors. Of course one doesn't know when the bubble will burst, but once it does, it can lead to a long correction," he said.

Courtesy : TOI