Rising gold prices have led to an 85 per cent drop in jewellery sales in Mumbai.
On Tuesday, gold prices hit a record high of Rs 12,950 per 10 gm. Jewellers said business had been badly hit since gold prices began their upward climb three months ago.
“Earlier, we would have at least 13 customers in the shop during peak hours. Now, for most of the time, we don’t have a single buyer,” said Kumar Jain, vice-president of the Jewellers’ Association and owner of Umedmal Tilokchand Zaveri at Dageena Bazaar in Mumbadevi.
Kumar said shops would normally shut at 8 pm and the staff would calculate total sales and count the money till 9 pm. “Now, we are out of the shop within five minutes of downing the shutter,” he added. Most people who need jewellery because of a marriage or other functions at home, Kumar said, are opting to exchange old ornaments instead of buying new ones.
Even buyers of old gold have been affected. “Business has dropped to 40 per cent of the peak,” said Dhiraj Jain of Chenaji Narsingji, one of the biggest buyers of old gold at Mumbadevi.
Dhiraj said that when gold touched Rs 9,000 per 10 gm, people sold their holdings to cash in. “They kept selling till it reached Rs 10,500 per 10 gm,” Dhiraj said.
After that, people stopped, thinking it would soar even further. The buying rate of old gold is generally Rs 50 per 10 gm less than the running price.
Many buyers have been forced to cut their budgets. “I wanted to buy a kilo of gold for my son’s wedding, but now I have to make do with a little over 250 gm,” said Malad resident Rekha Jain, whose son is getting married next month.
She had gone to the jeweller two months ago, but didn’t buy anything thinking that prices would fall. Now, she’s in a rush to buy before the price rises further.
Santosh Sanghvi, of Borivli, said she wanted to buy 500 gm for her nephew’s wedding, “but now I will probably opt for imitation jewellery.”
Jewellers believe gold will touch Rs 14,000 per 10 gm soon. Only then, they said, would prices drop.
Pankaj Bafna, owner of Padmavati Jewellers at Dageena Bazar, said the price was rising because investors were betting big on gold on commodity exchanges. “Also, people are preferring gold over the stock market, which is passing through a volatile phase,” said Pankaj.