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Gold takes a hit on V-Day

Even cupid’s arrow could not boost gold sales this year. Valentine’s Day saw record low sales, jewellers’ associations said, reports Manish Pachouly.

india Updated: Feb 16, 2009 15:26 IST
Manish Pachouly

Even cupid’s arrow could not boost gold sales this year. Valentine’s Day saw record low sales, jewellers’ associations said.

“Last year, I supplied jewellery worth Rs 5 lakh on February 14,” said Pankaj Bafna, owner of Padmavati Jewellers in south Mumbai and a wholesale distributor of gold and diamond jewellery. “This year, not a single order.”

The extraordinarily high price of yellow metal — it closed at Rs 14,760 per 10 gm on Friday, the last trading day of the week — saw even the most ardent lovers opt for 1-gm gold jewellery over the more elaborate ornaments on offer.

“These are gold coatings on either copper or silver, and are hence much, much cheaper,” Bafna said. “The demand for such tokens was 25 to 30 per cent higher than last year on Valentine’s Day. Buyers just can’t afford real gold.”

Most buyers seem to agree. Software professional Anirudh Kumar wanted to buy his wife a gold chain for V-Day.

“That would have cost me Rs 25,000 at the current rates, he balked. “I decided to go for 1-gm gold jewellery. It was affordable, and I found something really trendy too.”

With the price moving further north every day, demand for the yellow metal has plummeted overall, despite the marriage season that has just begun.

In January, only 2 tonnes of gold was imported, against the average monthly figure of 40 to 50 tonnes.

In February, there have been no imports so far.

There is no demand for gold, admitted Suresh Hundia, president of the Bombay Bullion Association.

In fact, those with weddings in the family are swapping old gold for new rather than try to buy afresh.

“Of late, sales have been only 10 per cent of what they should be during a marriage season,” said Kumar Jain, vice-president of Mumbai Jewellers’ Association. “Only about 10 per cent of our customers are buying fresh jewellery.”

Jain added that a lot of families are buying in advance, fearing prices will rise further. “About 20 per cent of our customers are making advance payments and booking jewellery the moment the price dips a little. These are people who have weddings planned about two months from now,” said Jain.

Aarti Sharma from Malad recently exchanged old jewellery, for a wedding in end-February.

“There was no option… gold is out of reach right now,” said Sharma.