Diwali seen to lift UAE jewellers

> FROM PAGE 31 The seasonal demand has been a major factor in the pattern of gold demand for at least two decades, and he expected this year to be no different. “We do not expect it to boost prices significantly as the overall market is subdued due to worries about rising interest rates and rising stock markets. If the Federal Reserve does not indeed hike interest rates in December, we expect gold to see a more positive trend and possible bounce back.”

Speaking in regards to sovereign gold bonds as a viable alternative to gold jewellery, Kapadia said: “When it comes to the Diwali festive season, the general public in India look to buy gold as an investment option in the form of jewellery. There will always be good seasonal demand for jewellery gifts at this time of the year. However, if one looks at it purely from an investment perspective, investors in India are looking at the government issued India Sovereign Gold Bond as one of the viable and healthier alternatives. These bonds offer the easy way to gain exposure to the gold prices, without the inconvenience of storing the physical metal.”

“The Indian government has already been pushing the bonds with considerable discount rates, and it is right in time for the festive season,” he added. “The bonds have a tenure of eight years and exit option from the fifth year onwards; the investor would benefit from the upward movement of the gold prices, if any, as well as a solid 2.5 per cent interest rate on maturity.”

— rohma@khaleejtimes.com