While gold has been scaling new peaks, jewellery sales are going down in the city's Sarafa market as most consumers are either staying away or exchanging their old jewellery. Traders say that people are waiting for a price correction before going ahead with their purchases.
"The business has declined by 15-20% in the past one year as gold prices have gone beyond the reach of the middle class. People are avoiding gold jewellery, and even for marriages the general tendency is to buy the bare minimum and supplement it with artificial jewellery,"
Indore Sona Chandi Vyapari Sangh president Hukumchand Soni told HT.
Jewellers say that the ratio of scrap trade (trading of old jewellery) has gone up significantly in the last two years or so. "If there is a marriage in the family, then a general tendency is to pay cash for part of the purchase and also trade in the old jewellery," Soni said.
Rohan and Sanjana Arora were among the people at the Sarafa market looking for a good price for their jewellery. Sanjana said the high price of gold was one of the reasons for selling her old jewellery that she no longer needed.
In fact, jewellers have been compelled to rapidly adapt their businesses in the face of sharply rising yellow metal prices due to global cues and a weakening rupee.
On Friday, gold prices in Indore bullion market touched a high of Rs. 31,025 before closing at Rs. 31,010 per 10 grams. Global gold rose to its highest levels in more than three months Thursday, shaking off months of lethargy after minutes from the latest US Federal Reserve meeting fuelled hopes for the swift launch of more bond buying. While festival season is underway and marriage season is also around the corner, experts say that gold sales are expected to fall sharply during this period. "It is difficult to judge the impact of price rise on the festival sales, but sales will be subdued if gold prices don't come down," Soni said.