Trading in bullion market comes to a halt

Mumbai Aug. 26. The normally bustling Zaveri Bazar wore a deserted look for the second day today following Monday's bomb blast in the centre of the bazar.

Hundreds of retail gold jewellery shops remained shut and trading in the bullion market came to a halt after opening for a brief period at mid-day. Since the Deputy Prime Minister, L.K. Advani, and the Congress president, Sonia Gandhi, were visiting the area and traders were advised to remain shut.

Zaveri bazar is Mumbai's largest gold and diamond trading centre. "The area boasts a daily turnover of Rs. 50 crores. Two days of complete closure has been very damaging for traders," said Suresh Hundia, president of the Bombay Bullion Association.

More than 70 jewellery shops were damaged by the impact of the bomb, which ripped through the crowded street that is lined with gold shops. Lalit Jain, a shop owner and trader, says that with the festival season round the corner, sales were picking up. Being shut for two days, he estimates he has lost about Rs. 1 lakh of business. It is estimated that there are about 2,500 gold shops in Zaveri bazar. Most establishments will remain shut for the next few days, says Mr. Hundia.

Gold prices that are set in Zaveri Bazar act as a benchmark for jewellery prices across the country, says Mr. Hundia. Therefore, the bazar being shut will impact gold trade across the country.

However, unlike the equity market, which crashed soon after the blast, the bullion prices have not reacted quite so dramatically. As against Monday's opening price of Rs. 5,530 per 10 gram for pure gold and Rs. 5,500 for standard gold — when the market opened for a short period today, the prices opened at Rs. 5520 per 10 gram for pure gold and Rs. 5490 for standard gold.

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