Perhaps for the first time, the retail gold market in Kerala is experiencing a sudden and severe shortage of the yellow metal.
The slump in the price, which has triggered an interest among customers in purchasing gold in the retail market, is frustrating to many clients as traders face short supply from wholesalers.
As gold shops across the State witness frantic buying, many of the popular retail showrooms down the shutters at intervals to control the rush.
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Retailers said the Thrissur-based wholesale manufacturers have virtually stopped taking orders, so they were unable to meet the retail demand. Gold coins are in high demand.
S. Abdul Nazar, State secretariat member of the Kerala Gold and Silver Merchants Association, said that while the price of 22-carat gold dipped to Rs. 2,435 per gram on Wednesday, the lowest during the period when the prices fell, 24-carat gold ruled at Rs. 2,624 per gram.
But none of the retailers could get the metal from wholesalers, who did not take orders citing holiday in Thrissur on account of Pooram.
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While customers are disappointed because there has already been a shortage of coins, many are forced to buy from the ornament stocks. But there is no dip in the buying spree as buyers see whatever they purchase as an investment.
At the same time, given the demand, retail traders fear that their markets might run out of gold if the wholesale manufacturers fail to rise to the occasion.
There are also allegations that the wholesalers hold back stocks, anticipating a rise in the prices.
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 has been underpinned by seasonal factors.
Normally, the post-Vishu season is wedding season, and the demand for gold is high in the retail market.
Coinciding with the period are the Pooram holidays for workers at the gold ornament manufacturing hub at Thrissur.
Earlier too, Pooram followed Vishu, but the retailers ensured ample stocks. Mr. Kamat said the additional demand triggered by the price fall was aggressive and not anticipated.
The bank holiday nationwide on Friday on account of Ram Navami also had its impact.
Since banks operating in the State would not give a quote on the U.S. dollar because of the holiday in the rest of the country, transactions could not be put through for buying bullion, the raw material for the retail markets, he said.
The entire gold import is made through banks.