Mumbai : Gold price in Mumbai has seen a steep rise of Rs 700 per 10 gram in a day due to the “save our Swiss gold” initiative in Switzerland where people’s vote will decide whether the Swiss National Bank (SNB) may be required to beef up its gold reserves from 7% to 20%. To do this, the bank, which manages official gold reserves, will have to buy the precious metal that will push up the demand internationally having impact in the local market too.
While the voting on it will take place on November 30, the local price has already been influenced by the move. Jewellers in Mumbai were selling gold at Rs 26,700 per 10 gram on Saturday as compared to Friday’s price of Rs 26,000. Jewellers expect if Switzerland votes in favour of beefing up the gold reserves, the local price would also sharply move up.
The initiative in Switzerland would prohibit SNB from selling any of its gold in the future. It would also require it to repatriate gold held overseas.
“This will require Switzerland to buy gold which will push the price up. This could also influence some other countries like Russia, China and Japan, who could follow the suit in buying gold to beef up their reserves,” said Kumar Jain, Vice President, Mumbai Jewellers’ Association. This will cause a huge appreciation in the price, he added.
Jain said that following the development in Switzerland the price has already moved up and further picture will be clear by Monday evening.
Ishu Datwani, founder, Anmol Jewellers, said that price is going to move up because of the development. “When price goes up internationally, it has impact here too,” Datwani said.
The development has also put investors on alert and they are keeping a close watch on the situation. “It’s a wait and watch situation. We will see how market reacts on Monday and will decide how much gold to buy,” said Sumit Sharma, a Goregaon resident, who invests in gold.
Most of the gold is imported in India from Switzerland.
– MANISH PACHOULY
