Gold price surged to a new high of Rs. 23,904 per 22-carat sovereign (eight grams) on Thursday, sending shock waves among city consumers. This is expected to further affect sales of the yellow metal, which has already seen a dip following spiralling cost in the past few days.

On Thursday, one gram of gold was sold for Rs. 2,988, an increase of Rs.16 from the previous day. The price of a sovereign has gone up significantly in the past few months. In early June, one sovereign sold for nearly Rs. 21,000. Silver’s cost is also on the rise and sold for Rs. 68 per gram on Thursday.

Several consumers wishing to purchase for upcoming wedding and festivals have had to postpone their plans. P. Aparna of K.K. Nagar said: “We wanted to purchase jewellery for my sister who is getting married this year-end. I am waiting for the price to drop by at least by a few rupees per gram.”

Some customers ended up buying less than what they had planned to.

Jewellers across the city said the soaring prices had affected sales by 40 per cent in the past week. However, they expect sales to improve soon owing to the festive season.

L.K. Syed Ahmed, chief advisor of Tamil Nadu Jewellers Federation, said the exchange of old jewellery has shot up by 60-70 per cent. The weakening of the rupee and rise in excise duty to four per cent this year had also influenced the increase in price.

According to World Gold Council, the central banks of many countries are continuing to increase their reserves alongside a rise in demand. The ongoing sovereign debt crisis in the eurozone is also a factor.

Jayantilal Chalani, president of the Madras Jewellers and Diamond Merchants Association, said that the weakening of the rupee has meant less imports from April leading to more demand. Tamil Nadu contributes to 35 per cent of theannual gold consumption of nearly 1,000 tonnes of the country.

“More gold investors are eyeing coins as returns are high. Italian light-weight jewellery is becoming popular. They come in 18 carat and cost Rs. 400 less per gram. We can create designs of traditional jewellery by using only half the amount of gold in Italian jewellery. The price is likely to soar to Rs. 3,100 per gram in the next fortnight,” he added.

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