Gold Prices Surge Ahead of Diwali; Silver Faces Short Supply in Indore Market

Gold prices have surged in Indore, making it difficult for average buyers to afford. Meanwhile, silver is scarce in the wholesale market due to high demand. Traders attribute this to increased interest in silver as an investment, given its substantial returns over the years. As Diwali approaches, this trend has reshaped shopping habits, with more people opting for silver jewellery over gold.

In the Indore bullion market, gold was priced at Rs 1,31,200 per 10 grams and silver at Rs 1,80,500 per kilogram on Wednesday. The festival of Dhanteras on October 18 marks the beginning of Diwali festivities and is traditionally a time for purchasing precious metals. However, the current high prices have altered consumer behaviour significantly.

Silver Demand Surges Amidst High Prices

Ratan Jain, a trader in the bullion market, noted that the rise in silver prices has attracted many investors. "People are attracted by the rise in silver prices over the past year. Obviously, the expectation of good returns is driving the increase in silver investment." He attributed this surge to both investor interest and increased industrial usage.

Another trader, Jinendra Dungarwal, highlighted the ongoing demand for silver despite its rising cost. "Despite the rise in silver prices, demand is increasing. Currently, it is difficult to find silver even at a price Rs 20,000 above the prevailing wholesale rate." He mentioned that any purchase made now would only be delivered after 15 days due to supply constraints.

Impact on Consumer Choices

The high cost of gold jewellery has led many to choose silver ornaments as gifts. Dungarwal explained that although wedding season is months away, speculation about further price hikes is prompting early purchases for weddings scheduled for January-February next year.

Some customers expressed disappointment over the escalating prices of gold and silver ahead of Diwali. Ritika Bhavsar, visiting the market with her mother, shared her concerns: "Lower middle class people are unable to muster the courage to buy gold. This is sure to impact the happiness of their families during the festival of Diwali."

The current situation has resulted in more footfall at stores selling silver jewellery compared to those offering gold ornaments. The anticipation of good returns from silver investments continues to drive this trend as Diwali draws near.

With inputs from PTI