In 2000, 10 grams of gold was priced at Rs.4,400. The price of the yellow metal of the same weight is now Rs.20,400 in the city, according to All India Gems and Jewellery Trade Federation. The gold and silver prices, which have been soaring in recent weeks, have dipped marginally in the past two days.
The cost of a gram of 22-carat gold, which was Rs.2,059 on Monday, was Rs.2,040 on Wednesday. The price of silver, which was also ruling high with one gram at Rs.79.20 on Monday, also declined on Wednesday to Rs.73.15.
The dip in price is hardly a reason to cheer as the precious metals remain out of reach for many customers.
This has also affected the wedding budget of many households like that of Vedavalli Chandramohan, a resident of Saidapet. She said: “My daughter's wedding is set for next month. I cannot afford to get her big jewellery when gold price is at this rate. I am also exchanging my old jewellery for new ones.”
Many customers are turning their attention to light-weight. G. Saroja, a resident of Koyambedu, recalls having bought two sovereigns of gold for Rs.10,000 seven years ago. “Now, I can afford only a few grams for that money,” she said. Customers are also purchasing gold coins of lesser weight and plan to exchange them for jewellery when they have accumulated a significant number.
According to jewellery shop owners in the city, the sales have picked up after the elections as people can carry more cash now. As Akshaya Tritiya day is nearing, several showrooms are offering many schemes, including one under which the customers can buy jewellery at the rate prevailing on the day of booking.
K. Surendranath, senior manager (marketing) of Original Kerala Jewellers (OKJ), said “While we still get the same number of customers, the quantity of purchase has decreased because of the escalating cost. Exchange of old jewellery has also reduced.”
The price of silver has also gone up from Rs.45 per gram a month ago owing to increasing investment. The livelihood of goldsmiths has also been affected as they get fewer orders to make jewellery compared to last year. Kandan Achari of Sowcarpet said the production has become less and jewellers have stopped buying new gold.
Many factors are being attributed to the rising price of the yellow metal. N. Anantha Padmanabhan, chairman of Gold Club of Chennai, said the U.S. economy and online trading also influences the cost besides the crude oil price.
Mr. Padmanabhan, who is also the regional chairman of All India Gems and Jewellery Trade Federation, said the price of gold has increased by nearly 133 per cent in five years between 2005 and 2010. Some jewellers are planning to introduce 18-carat jewellery in a small way for people who cannot afford 22-carat gold. It is usually used only in diamond jewels as customers do not prefer the particular shade. While 22-carat jewellery is 91.6 per cent pure, 18 carat denotes 75 per cent purity, he added.
Customers have started investing in silver as it is more affordable than gold and silver jewellery also has re-sale value, he said.
Fashion jewellery is also gaining momentum among the people as gold price is soaring. K. V. Narayana of Narayana Pearls and Gems said more new designs are introduced in fashion jewellery, which is made of silver coated with gold. Fashion jewellery is increasingly finding a place in wedding purchases.
