With gold rates witnessing fluctuations like never before in recent months, the sale of jewellery has decreased. The volume of jewellery sold has declined by nearly 30 per cent, but the number of customers remains the same, according to jewellers.
On Tuesday, one gram of 22-carat gold was priced at Rs.2,524. On Monday, it was Rs.2,552. The price touched Rs.2,661 on August 23. One gram of silver costs Rs.66.90, as per the rates on Tuesday.
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Some customers, according to jewellers, are opting for purchase of coins as an investment option. B.Subbulakshmi, who has been buying an one gram coin every month for the last few months, says she has put the practice on hold following the steep increase in prices. In a bid to attract small investors, jewellers have introduced coins weighing half a gram costing little over Rs.1,000.
Many have also started diverting money from other saving schemes into gold. The returns would be much more as the gold cost is on the rise, says Meena Nagarajan, a senior citizen. She recalls having purchased gold for Rs.200 a gram in early 1980s. Silver price has also gone up in the past few years. “I bought one kg of silver for Rs.30,000 two years ago. The price has doubled now,” she adds.
Yet another trend is that of customers choosing smaller shops in their neighbourhood. Homemaker S.Praveena says “I visit a small jewellery shop near my house as I have the option of paying later and also get a special discount.” Some like Hukamchand Jain prefer online trading of gold. “The process of buying and selling is easy and secure,” he said.
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Jewellers are counting on the forthcoming wedding season to perk up sales. “Every time the rate increases, the volume of purchase comes down. We largely rely on customers who have remained with us for one or two decades,” says a spokesperson of T.B. Jewellery.
Insecure customers
According to a spokesperson of Original Kerala Jewellers, such a fluctuation in prices often makes customers insecure. “Some make a purchase fearing that the rates may escalate further the next day.
On days when there is a slight fall in rates, people hesitate to purchase, hoping the rates would fall some more,” he says.
In case of loyal customers, they ask their jeweller to intimate them on a “good day to buy”.
“We do alert a few customers who have been visiting us for many decades on days that the rate falls, ,” he adds.
Tough time for goldsmiths
Goldsmiths also have tough time in finding jewellery orders. Mithun Pramanik, a goldsmith at Sowcarpet, says “I am getting fewer orders over the past six months. I used to get orders to make a minimum of jewellery weighing two kg of gold every month until a year ago. Now, it has reduced to half a kg.”
N.Anantha Padmanabhan, regional chairman of All India Gems and Jewellery Trade Federation said nearly 60 per cent of the sales was through exchange of old jewellery. Chennai gets its gold from Dubai and Switzerland.
Only a small section of people invest in online commodity market and it does not have much impact on the price.
Attributing the price fluctuations to the volatile U.S. economy, he said the cost would continue to be wavering for some more months.
But, would it be a good idea to sell gold now?
“No,” say jewellers. Unless there is a short-term requirement for cash, customers should not sell gold.
Jewellers say it won't be too long before one gram of gold costs Rs.3,000. Why sell a commodity that is rising in value by the day?, ask jewellers.