Mumbai, August 26: Breaching a psychological barrier, gold prices in Mumbai touched new high of a little over Rs 40,000 per 10 gm, on Monday, industry players said. "This is indeed an unprecedented high, but lower by at least 20 per cent in US Dollar terms. Presently, it is $1,545 on the Comex, lower that $1,920 in September 2011," expert and former All Indian Gems & Jewellery Federation Chairman Bachhraj Bamalwa told IANS.

According to Bamalwa, if the current global political crises and the trade wars continue to escalate, then the gold prices may shoot up further, crossing Rs 41,000 per 10 gms in the next few months. However, he said optimistically that despite the zooming prices, demand for gold may be marginally affected, around 10 per cent or so, as the wedding and festival seasons begin next month, which are incomplete without gold in India. Global Gold Prices See Biggest One-Day Fall in a Year, India Gold Rates Echo Similar Sentiment.

"Instead of fresh purchases, people may opt for recycling of old gold, at least up to 25 per cent, in view of the higher prices," Bamalwa said. Seconding this, Mumbai Jewellers' Federation President Rakesh Shetty said the incidence of recycling of old gold is actually as high as 70 per cent and sales have declined by over 65 per cent.

"People simply prefer to bring in their old gold and pay the making charges for their needs as the current rates are too high. If the current global crises continue, then we expect it to cross Rs 41,000/10 gram by Diwali, which is not a healthy sign for the industry," Shetty told IANS. India consumes an average of 700-800 tonne of the yellow precious metal annually, said Bamalwa.

(The above story first appeared on LatestLY on Aug 26, 2019 01:05 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).