Several jewellery showrooms in the city are reporting a dip in sales over the past couple of days as customers, wary of fluctuating prices, are refraining from purchases.
The cost of yellow metal that plummeted to Rs. 2,379 per gram on June 28 has steadily risen this month. On Friday, one sovereign of 22-carat gold was priced at Rs. 20,872. This was Rs. 336 more than Thursday’s rate.
Residents are confused over how to respond. Malathi Dileep, a resident of Sowcarpet, said she was waiting for the price to settle before she exchanges her old jewellery for new. However, some other customers said they were worried over the possibility of prices rising further and had begun making wedding purchases despite ‘aadi’ being considered an inauspicious month.
Jewellers in the city said that the rise in international prices of gold and the weak rupee value were responsible for the soaring cost of gold. Moreover, the restrictions by the government on gold imports had led to a slowdown in the trade. The Reserve Bank of India recently announced that 20 per cent of gold imports must be used for export.
Jayanthilal Chalani, president of Madras Jewellers and Diamond Merchants Association, said the move indirectly restricted imports and would increase the gap between demand and supply of gold. Meanwhile, All India Gems and Jewellery Trade Federation plans to meet Union Finance Minister P. Chidambaram with recommendations on resolving the current account deficit problem.
The Federation’s regional chairman N. Ananthapadmanabhan said that the sales were already down by 30-40 per cent in Chennai. If the restrictions on gold import continued, the price would increase and affect the trade. Gold export contributed to only 7 per cent of the total consumption, he said.
“We have come up with ‘Swarna Bacho Plan’ where citizens can deposit their jewellery at the banks for a stipulated period, at interest. This will unlock the hidden reserve among the residents,” he said. The price of silver has also witnessed a slight increase and one gram of silver was sold for Rs.44.10.
