Tapan Patel Warns: Gold Dip Won't Deter Akshaya Tritiya Buyers

Tapan Patel, a veteran gold market analyst, has urged investors to ignore the recent decline in gold prices, saying the demand for gold during Akshaya Tritiya remains strong. The annual festival, which falls on April 21 this year, is a key shopping period for gold in India, and Patel argues that the dip is temporary and should not deter buyers. The Central Bank of India has also noted a slight slowdown in gold imports, but analysts believe the overall trend remains positive.

Gold Prices Drop, But Demand Remains Strong

Gold prices in India fell by 2.5% in the week leading up to Akshaya Tritiya, according to data from the Mumbai Gold Exchange. The drop came as global markets reacted to rising US interest rates and a stronger dollar. However, Patel, who works with Digi Gold, a major online gold trading platform, said the decline is not a sign of weak demand. "Investors should not be scared by short-term volatility," he said. "The cultural and economic significance of Akshaya Tritiya ensures a steady flow of buyers."

The festival is traditionally a time when many Indians, especially in states like Gujarat and Maharashtra, buy gold for weddings, religious purposes, and as a hedge against inflation. This year, Patel expects the demand to be even stronger as inflation remains high and the rupee continues to weaken against the dollar. "Gold is still seen as a safe asset," he added. "Even with a slight dip, the long-term outlook is positive."

Central Bank Data Shows Mixed Trends

The Central Bank of India reported that gold imports fell by 8% in the first quarter of 2024 compared to the same period last year. This decline, however, is attributed to a temporary slowdown in consumer spending rather than a shift in preference. Patel said the drop in imports is not a cause for concern. "The demand is still there, but it's more about timing and the availability of gold in the market," he explained.

Despite the dip, gold prices in India have remained relatively stable, with the price per gram fluctuating between ₹5,200 and ₹5,400. This stability, Patel said, is a sign that the market is resilient. "Investors should look at the bigger picture," he said. "Gold is still one of the best-performing assets, especially in an environment of economic uncertainty."

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For investors, the recent dip in gold prices has sparked debate about the best time to buy. Some analysts suggest that the current price levels offer a good opportunity for long-term investors, while others caution against overexposure. Patel, however, remains optimistic. "This is a time to buy, not sell," he said. "Gold has always been a reliable asset, and Akshaya Tritiya is a key event that drives demand."

Businesses in the gold sector, including online platforms like Digi Gold, have reported a surge in traffic and inquiries as the festival approaches. Patel said that the company has seen a 20% increase in user sign-ups in the past month. "More people are turning to digital platforms to buy gold, which is a positive sign for the market," he added.

What to Watch Next

As Akshaya Tritiya approaches, investors and businesses are closely monitoring gold prices and market trends. Patel expects the demand to remain strong, with prices stabilizing by the end of the week. "The key is to stay informed and make decisions based on long-term goals, not short-term fluctuations," he said.

The Central Bank of India is also expected to release its latest economic update in the coming weeks, which could provide further insight into the gold market. For now, Patel's advice remains clear: don't let the recent dip in gold prices scare you. "This is a time to invest, not to panic," he said. "Gold is still a strong asset, and Akshaya Tritiya is a key driver of demand."