Gold price plummets in Chennai, sales soar

Result of dip in global rates; jewellers to stop sales of gold coins to help control imports

June 29, 2013 08:39 am | Updated November 16, 2021 08:33 pm IST - CHENNAI:

Gold prices in the city continued to plunge on Friday, drawing hordes of customers to jewellery showrooms.

One gram of 22-carat gold was priced at Rs. 2,379 on Friday, Rs. 91 lower than the previous day’s price. For residents buying jewellery for weddings, the plummeting prices have come as a boon.

R. Pramila, a resident of K.K. Nagar, said the cost of one sovereign of gold (eight grams) went down to Rs. 19,032 on Friday, which was Rs. 728 less than the price on Thursday. “The cost of gold has been fluctuating over the past few months. I thought this was a good opportunity to buy because of the steep fall in price in just one day,” she said.

Jewellers said the fall in the price of the yellow metal was due to dipping international costs. Internationally, gold prices are hitting a new low every day — the international gold price has fallen by 13.6 per cent in the past month alone. Jewellers also said gold would have been cheaper however, if the value of the rupee had not depreciated.

Jewellers in the city said that from next month, they would stop selling gold coins and even bullion in their showrooms. Jayanthilal Challani, president of the Madras Jewellers and Diamond Merchants Association, said that jewellers across the State, including nearly 3,000 in the city, would stop selling gold coins to support the Central government’s initiative to control imports and improve the current account deficit.

Gold coins contribute to 20 per cent of the total sales of gold in the city. However, small-time investors in the city are disappointed with this decision.

The price of the gold is expected to dip further in the next few days. The cost of silver too, has dropped from Rs. 42.80 to Rs. 42.10 per gram on Friday, Mr. Challani said.

Jewellers also said that more customers are now turning their attention to 18-carat gold ornaments and diamonds.

Suraj Shantakumar, director of jewellery showroom Kirtilals said that sales of diamonds have gone up by 20 per cent compared to last year. With the price of diamonds rising, they are being seen as good investments by a section of customers, he said

More showrooms are now offering collections of 18-carat gold ornaments, which are priced lower than those made of 22 carat gold. Vummidi Uday Kumar, secretary of Tamil Nadu Jewellers Federation, said that youngsters preferred 18-carat jewellery for their trendy design and durability. “Jewellery made of 18-carat gold works out cheaper than the same design made in 22-carat gold. 18-carat gold jewellery also has good resale value,” he said.

Chennaiites would have been able to buy 22-carat gold at prices at least 10 per cent lower than current prices if the rupee value had appreciated, Mr. Uday Kumar said.

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