High gold rates keep customers away in Coimbatore

The rate of 22 carat gold crossed ₹6,000 a gram mark on March 4 in the Coimbatore market and was more than 6,500 a gram on Thursday.

Retail sale of jewellery has fallen almost 70 % , said B. Muthuvenkatraman, president of the Coimbatore Jewellery Manufacturers Association, and B. Sabarinath, president of Coimbatore Jewellers Association.

Sale of gold jewellery is usually slow in March because it is the end of a financial year. This year, the high cost of gold and the model code of conduct for the elections are also factors that are keeping customers away, said Mr. Sabarinath.

“We are doubtful of the prices softening in the near future. The current geo political situation does not give hope,” he said. Further, the annual global production of gold is 3,200 tonnes and India’s official consumption is 800-900 tonnes. The prices are up due to global reasons, he said.

According to Mr. Muthuvenkatraman, the central banks of several countries are buying gold now because of the geo political situation. While the election code of conduct has affected sales, the Election Commission of India changed the standard operating procedure this year and all the seized gold have been released. “This is a welcome step as the gold seized is released in three hours or so,” he said.

However, if a person carries more than ₹50,000 without proper documents, the officials can seize it and a customer cannot purchase even eight grams of gold with ₹50,000. So, retail sales is expected to be low till June 4, he said.