Gold remained lacklustre even on Dhanteras as global weakness in the precious metal failed to offset token buying by jewellers and retailers on Friday, resulting in the yellow metal losing Rs 110 to close at Rs 30,590 per 10 gm. Silver remained unchanged at Rs 42,700 per kg.
In the past one month, gold has lost almost 2.50 percent from its September 29 closing price of Rs 31,350.
Gold prices have increased by Rs 4,360, or 16.6 percent, while silver has gained Rs 7,290, or 20.58 percent from last year's Dhanteras, according to PTI.
The auspicious buying of gold on Dhanteras did not lift prices, though jewellers were hopeful of bullish sales this year on the back of salary bonanza to Central government employees with the partial implementation of the proposals of the 7th Pay Commission and a good monsoon after two straight years of drought.
Gold jewellers had pinned their hopes on these factors to see higher demand this year.
"Diwali bonuses coupled with the increased purchasing power triggered by the 7th pay commission is expected to notch up the demand for gold this season. The wedding season round the corner will also have a positive demand on the growth," Pratap Kamath, CEO of Bengaluru-based Abaran Jewellers had said a few days ago.
"In fact, jewellery buying during this Dhanteras is expected 30 per cent more than last year," he added.
Crowds at jewellery shops could be telling a different story, suggests an IANS report from Mumbai. "This is despite the fact that the gold prices are around Rs 30,450/10 gms (per tola) compared to Rs 25,450/10 gms on Dhanteras last year (2015)," Mumbai Jewellers Association's Vice-President Surinder Kumar Jain told the agency.
Most of the gold jewellers are family-owned businesses in India, while a few are listed companies, such as PC Jeweller, Gitanjali Gems, Titan, which retails jewellery under Tanishq brand and Tribhovandas Bhimji Zaveri (TBZ).
On Friday, Titan shares gained 1.46 percent, PC Jeweller 0.30 percent and TBZ 3.85 percent, while Gitanjali Gems lost 1.13 percent. TBZ and Titan will be declaring their Q2 results on November 9 and 4, respectively.
The recommendations of the 7th Central Pay Commission cover 47 lakh Central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.