TEMPTING BUT PRICEY: With marriage season round the corner, the demand for gold is bound to shoot up.

HYDERABAD: With marriage season round the corner, the steep hike in gold price could not have come at a more inopportune time for all those gearing up for gold purchases.

The price of yellow metal hovering between Rs. 760 and Rs. 840 per gram in the last few weeks, registered a steep hike on Tuesday and it ruled at Rs. 886 per gram on Wednesday, the official price of the Twin cities Jewellers Association.

"Irrespective of the hike, we have to buy gold for the coming wedding in the family. We will be getting less gold now for the budget we had already made," said Ramaswamy who was at Tanishq with his wife, selecting gold necklaces.

The steep hike is bound to impact sales, as it is likely to keep casual buyers and middle class customers away from jewellery shops for some time. "But we expect sales to pick up during the marriage season that lasts till June," said a sales executive at Tanishq. It is the season when heavy traditional jewellery is bought compared to the light weight and subtle-looking pieces, he said.

Wooing customers

The market has its own mechanisms to compensate for the spurt in price such as discount in making charges, value for the money, exchange facility and bringing down the rate by Rs. 10 to 15 per gram. Tanishq even offers an option to reserve a jewellery piece by paying 80 per cent of its existing value and collect it after paying the rest at customer's convenience. "Quite a few customers benefited this way. They got the piece at the old rate even after price hike," he revealed. The steep hike however has not deterred those looking at gold as an investment option.

For instance a customer who bought ornaments about six months ago, gained by about Rs. 80 per gram. "There are many who keep buying gold to sell it later for a better price just like stocks what with the gold prices becoming volatile," said Narender Ajha and Venkatesh of Meena jewellers. The gold prices influenced by international market are expected to touch Rs. 10,000 per 10 gm by end of Deepawali season, they predict.

But Ramaswamy and Sudha Srinivas rule out gold as an investment option. "Gold has sentimental value and rarely people dispose of ornaments just for profit," Sudha said. "I would rather invest on something that cannot be stolen easily. For instance real estate," said Ramaswamy.

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