Many stayed away from showrooms as they were unsure of the trends in the coming days
The cost of 22-carat gold dipped by Rs. 496 per sovereign in the city on Thursday. But, the development did not trigger a surge in sales as most customers stayed away from jewellery showrooms, wary of the volatile trends in prices.
One sovereign of gold (eight grams), was priced at Rs.20,512 on Thursday as against Rs.21,008 the previous day. The continued fall in international prices had led to the dip in the cost of the yellow metal, according to jewellers.
However, the demand for jewellery has come down by 30 per cent as May and June are generally considered off-season months. The number of customers has dwindled as many of them have other expenditures. Many of them had already bought ornaments when the gold prices hit a low last month.
Meanwhile, many customers are eyeing 18-carat ornaments — which comprise 75 per cent pure gold — to cope with the ups and downs in prices of 22-carat gold. Residents like T. Shyamala of T. Nagar, who were looking at gold as an investment option, said they would rather wait as the prices kept vacillating. Many were also keen on 18-carat jewellery as prices are more stable. Jewellers said the trend of purchasing 18-carat gold is catching up in the city with some showrooms offering exclusive collection. These ornaments, which are Rs. 300 - Rs 400 cheaper per gram, come in Italian and Dubai designs. Platinum, which is the expensive metal, is yet to attract more customers as there is not much resale value.
Jayantilal Challani, president of the Madras Jewellers and Diamond Merchants Association, said that the prices of 22-carat gold would have dipped by at least Rs.1000 – Rs. 1500 per sovereign going by the slump in gold costs in the international market. But, the weak rupee value proved a stumbling block to a further decrease in prices here.
Meanwhile, All India Gems and Jewellery Trade Federation plans to recommend a ban of the sale of gold coins in banks. It will also suggest that the government offer gold deposit schemes to save the industry from the impact of the hike in import duty.
Its regional chairman N Ananthapadmanabhan, in a press briefing, said that the hike in import duty to 8 per cent and sanction of import only by cash has brought down imports.
But, the demand has not come down accordingly. The present dip in sales was also temporary.