Akshaya Tritiya – A Day Of ‘Golden’ Transactions

Today can be called as “yellow day” as it is Akshaya Tritiya and consumers are buying gold coins and jewellery as it is traditionally considered as one of the best days for purchasing metals, especially gold. In India gold is primarily considered as consumable commodity rather than an investment option as considered in the rest of the world. And therefore individuals buy gold given the fact that it is at a higher level of around Rs 29,000 per 10 grams.

Investors have various options for buying gold as there are ways like futures, ETFs and physical gold. Most of them choose to go with the physical option of buying gold as still the financial buying of gold (in demat form) has not attained maturity in India. However, the Indian stock exchanges, BSE and NSE, have extended their trading hours till 8 pm in gold ETFs (exchange traded funds), which allow the purchase and sale of the yellow metal in paperless electronic format. Besides, the two bourses have decided to waive off the transaction charges for all trades done in gold ETF securities.

Taking this in mind many of the banks like Union Bank of India, Bank of Baroda, etc have announced a 2 per cent discount on their gold coins which have 999.9 purity. However, the condition imposed by the banks is that the discount would be given only if the customer purchases 10 or more coins. The price offered by the banks exclusive of VAT after 2 per cent discount is around Rs 29,768 per 10 grams.

As per reliable sources, the market price in Zaveri Bazaar, Mumbai today was approximately Rs 29,100 per 10 grams (including VAT) which has 999.5 purity. Hence if this converted into 999.9 purity the gold price would work out to Rs 29,216 per 10 grams which is cheaper approximately by Rs 850 per 10 grams when compared to the price offered by the banks.

The Indian markets are integrated and any news or events is bound to have an impact on the Indian stocks. Some of the major scrips which are into the jewellery business showed muted to subdued performance in today’s trading session. This might be due to the fact that individuals are buying more of gold coins and bars rather than buying gold and diamond jewellery. The following are some of the scrips which showed lacklustre performance, even though on a speculative basis they would have traded higher.