Gold supplies run short as demand soars

Jewellery outlets continued to witness heavy rush in the city on Saturday while the yellow metal remained at the previous day’s rates – Rs.2,500 per gm and Rs.20,000 per sovereign (8gm). Unprecedented demand witnessed during the past few days has eroded the stocks in some shops which sought to restrict the sale at times.

Many of the jewellers were unable to replenish the stocks of certain items due to focussed demand which resulted in shortage of them. Some of the outlets downed shutters for a while when the crowds surged beyond controllable levels, market sources said.

Several reasons contributed to the depletion of stocks of some items, the foremost being sustained demand ever since the prices slid steeply on Monday last. The buying was two-three times the normal in Kerala, said B.Govindan, a prominent jeweller.

“Thrissur is the hub of handmade jewellery in Kerala. The gold jewellery makers generally take a few days’ break after Vishu. As their recess extended to Ramanavami and Thrissur Pooram, the stocks which exhausted at several outlets could not be replaced,” he said.

The consumption was above normal in the rest of the country and abroad. Gold is being imported by some banks which also failed to import in time to cope with the sudden spurt in demand, he said.

All Kerala Gold and Silver Merchants’ Association president B. Girirajan said the week witnessed an unprecedented supply-demand gap. Many people who had booked gold for future occasions turned up at jewellery outlets to purchase ornaments in advance as the prices dropped drastically. Even those who booked for the forthcoming Akshaya Tritiya bought gold during the week, opting for making a nominal purchase on the auspicious day later.

The small traders who sell gold to the jewellers demanded a higher price which discouraged prospective bulk buyers, further widening the demand-supply gap.

Some of the suppliers based in Karnataka were hesitant to take a road trip to Kerala in view of the strict vigil there in view of the forthcoming Assembly elections there. It also added to the present scenario of short supply of the yellow metal, according to him. The situation will improve next week, he said.