The government's sudden and unexpected move to demonetise currency notes of high denomination of Rs 1,000 and Rs 500 prompted many people in the State to convert their unaccounted for cash into gold by buying jewellery and gold bars with 20 to 30 per cent premium.
"People frantically bought gold bars and jewellery till late midnight. For jewellers, it turned out to be a goldmine for us," a prominent jeweller in Ahmedabad told The Hindu.
Long queues were witnessed outside jewellery showrooms in Ahmedabad, Surat, Vadodara and Rajkot to purchase yellow metal and dispose of cash which is often unaccounted for.
"People did not mind paying premium to buy whatever they could as they were scared and did not know what to do with cash on hands," he added.
Another jeweller said average purchase per person was more than Rs one lakh. "Most of transactions were made back dated."
Some people even paid Rs. 35,000 for 10 g gold coin against the price of about Rs. 30,000.
Meanwhile, all roads in Gujarat and particularly Delhi Mumbai highway are witnesses long jams and vehicle queues as toll plaza operators are refusing to accept high denomination currency notes.
"Huge traffic jams across all highways in the state because toll plaza operators are not accepting Rs 1000 and Rs 500 notes. Even petrol pump operators are not taking notes despite the government's instruction," a senior police official said.
According to him, there is liquidity crunch as new notes are yet to be circulated in the market while not adequate stock of Rs 100 notes because more than 70 % transactions are done with high denomination notes.
