Indian jewellers in recessionary pain: Reuters

Jaipur jewellery manufacturers and exporters are in a recession pain. Gobal recession disease have caught the traders and the very first symptom is falling export orders.

Until last year traders dealing in gems and jewellery segment were earning huge profits. But now the situation has reversed, gem city is facing an adverse impact of recession in the global economy.

Recession has directly hit the jewellery manufacturers and exporters as there is no more order booking coming from the offshore buyers. Jeweller exporters fear the impact would be felt in the coming quarter.

"As far as global recession is concerned, people are thinking that the sales may go down. If the sales go down during the Christmas season, then the impact can be seen in the next quarter," said Jagdish Tambi, Spokesperson, Jaipur Jeweller's Association.

Majority of the jewellery is exported to the US and the there has been a sharp fall in the quantity of export due to recession in the US. Falling exports has also resulted in sizable retrenchment of workers in the jewellery industry.

"There are a lot of people who have lost jobs because export orders have been cancelled. Lesser order, lesser work, every body can feel the impact. It is not that the recession is affecting the US only," said Sudheer Kasliwal, an exporter.

What started in the US about 18 months ago as a housing mortgage crisis has slowly engulfed the whole world and India is no exception.

Gold prices climb due to global economic slump: Karvy Comtrade

Gold prices traded in the range of $729.6-$802.8 a troy ounce, as the firmer US dollar propelled a volatile movement in the precious metals sector. The slump in equities in conjunction to the deepening crisis has eroded the investor confidence, thereby proving negative for the precious metals. The price of crude oil dropping below $49 a barrel renewed speculation that a global recession will cut demand for precious metals and raw materials. The dollar rose against the euro as prices paid to U.S. producers plunged and homebuilder confidence fell, increasing demand for the safety of government debt indicted by the substantial increase in TIC flows.

However, prices erased earlier losses and moved higher on speculation the Federal Reserve will lower interest rates to stimulate the U.S. economy, boosting the appeal of the precious metal as an alternative asset. The yield on two-year Treasury notes dropped below 1 percent for the first time ever on bets the Fed will cut its benchmark rate next month. The poor housing sector performance, steep increase in jobless claims and contracting manufacturing activity helped gold prices to move higher. On the weekend, gold prices climbed as the global economic slump dragged down asset prices and boosted the appeal of the precious metal as a store of value.

According to the world gold council, the demand for the precious metal increased 18 % in the third quarter as lower prices encouraged purchases by jewelers and as investors sought a haven from the credit crisis. So-called identifiable investment, which includes purchases through exchange-traded funds and of bars and coins, climbed 56 % to 382.1 tons during the quarter.

Other precious metals, which have wider industrial applications than gold, fell on concern that a global recession may damp demand for all commodities. The International Monetary Fund projected that economies in the U.S., Japan and the euro zone will all shrink in 2009.

This week, fundamentally we expect gold prices to trade sideways amid lower US GDP growth (P), declining home sales and durable goods orders. The gains are likely to be limited by the strengthening dollar and poor economic condition in euro-zone.

Titan Industries Net Profit up 88.2%

Titan Industries reported that its second quarter Net Profit has jumped up by 88.2%. The company reported its net profit increased to Rs87.14cr from Rs46.30cr in same quarter previous year.

The Company registered an increase of 52.4% in its income which was Rs1,104.85cr as compared to Rs725.11cr, during the corresponding period last year.

The groups’s core businesses-Watches and Jewellery, have grown significantly over the previous year, the company said in a statement.

The Company’s Watch sales grew by 18.8% with its income increasing from Rs255.34cr during the second quarter of last year to Rs303.45cr in second quarter of 2008.

While the Jewellery income grew by 71.4% to Rs752.18cr versus Rs438.84cr in same period previous year. The spurt in jewellery income was also due to the increase in gold price during the quarter, the company said.

“We have had a significant expansion in the network. Despite high volatility in gold prices, the Tanishq and Gold Plus showrooms continue to attract discerning customers who value our products and service offerings. We will be launching a number of new collections in watches, jewellery and eyewear categories during the coming festival season,” said MD of Titan Industries, Bhaskar Bhat.

The group’s other businesses grew by 93.7% from Rs17.62cr during the quarter in 2007 of last year to Rs34.13cr during the corresponding period this year.

The company said in a statement that the first half of the current year has shown good growth and its Net profit has jumped by 102.5%, from Rs58.94cr during last year to Rs119.36cr this year.

Watch sales have grown over 12% to Rs475.34cr and Jewellery sales have grown by 51% to Rs1,367.90cr compared to last year. Total sales are also reported to be up by 38.2% from Rs1,391.70cr during last year to Rs1,923.91cr this year.

Gold still on the back foot: Standard Bank

“Gold is still on the back foot. With more dollar strength in the pipeline, the yellow metal is putting up little resistance,” said a Standard Bank report on Wednesday.

On MCX, the December contract for gold was trading at (14:54 IST) Rs12,188, down by about 1.5% from its day’s high of Rs12,317 on Wednesday.

MCX Gold December gold prices plunged to Rs12,307 levels and settled at Rs12,377 levels on Tuesday.

“Market is expected to come down and the next supports can be seen at Rs12,200 and then Rs12,050 levels,” said a Karvy Comtrade report on Wednesday.

The report also mentioned that the resistances can be seen at Rs12,400 and then at Rs12,436 levels. “If market sustains below Rs12,436 we may expect gold trading lower. We recommend taking short positions for the day,” it added.

The Standard Bank report also mentioned that after a steady opening just below $800 in Tokyo, gold moved gradually south as the euro weakened. At $790, some stops were triggered, and the metal quickly fell to $785, it said.

“With the dollar still on the rise, gold could remain under pressure today. Primary support is at $757, and a secondary support band at $742 - $720. Resistance is at $794, $810 and $818,” it said.