Perhaps, for the first time the retail gold market in the State is experiencing a sudden and severe shortage of the yellow metal. The price drop, which has triggered an interest in purchasing gold from the retail market has frustrated a good number of customers as retail traders face short supply from wholesalers.
As gold shops across the State witness frantic buying, many of the popular retail showrooms are downing shutters at intervals to control customer rush. Retailers said Thrissur-based wholesaler manufacturers had virtually quit taking orders as a result of which they were unable to meet the retail demand. The item in high demand is gold coins.
S. Abdul Nazar, State secretariat member of the Kerala Gold and Silver Merchants Association, said while the price for 22-carat gold during the price fall phase touched the lowest of Rs. 2,435 a gram on Wednesday, the corresponding price of 24-carat gold was Rs. 2,624 a gram. But none of the retailers could get the metal from wholesalers at that price as the latter failed to take orders citing holiday time in Thrissur on account of Thrissur Pooram.
While customers remain disappointed as there is already a shortage of coins, many are forced to buy from the ornament stocks. But there is no fall in the buying spree as buyers see whatever they purchase as an investment. At the same time, given the demand, retail traders even fear whether their markets would run out of gold if the wholesale manufacturers failed to rise to the occasion. There were also allegations that the wholesalers could be holding back stocks in anticipation of a rice rise.
Ram Mohan Kamat, secretary of the Calicut Bullion Dealers Association, told The Hindu that there was a temporary shortage of the metal mainly because the price fall had been underpinned by seasonal factors. Normally the post-Vishu season is wedding season and there is high demand for gold in the retail markets.
Coinciding with the situation is the pooram time holidays for the workers at the gold ornaments bulk manufacturing hub at Thrissur. Though earlier too pooram followed Vishu, the retailers ensured ample stocks through advance purchase to meet the wedding season demand. Mr. Kamat said the additional demand triggered by the price fall was aggressive and something not anticipated. The bank holiday on Friday in the rest of the country on account of Ram Navami also had its impact on the situation.
He said that since operating banks in Kerala would not give a quote on the US $ owing to the bank holiday in the rest of the country transactions could not be put through in its entirety for purchasing bullion, which is the raw material for the retail markets. The entire gold import was only made through banks which were designated agencies. At the same time. supply was expected to be back in place by Wednesday, Mr. Kamat said.
Mr. Nazar said that gold markets were now more vibrant than the rush for the Akshya Tirtiya purchase. While the latter purchase was mainly light weight products, the buying spree now was for heavy weight products too. Rajeev Paul, managing partner of Chungath Jewellers said while the maximum was being done by retailers to keep customers happy, wholesale manufacturers were frustrating both the customers and the retailers by failing to take orders.