Behind the shimmer
The price of the yellow metal hit an all-time high this month, cutting into traders' margins as well as forcing buyers to cut purchases and recycle jewellery. Riddhi Doshi writes.mumbai Updated: Sep 23, 2012 01:31 IST
Businesswoman Neelima Pandit*, 27, is busy planning her October wedding. The caterer and florist are fixed. The only thing she is still struggling with is the jewellery.
In the last two weeks of August, the price of gold jumped from Rs 29,000 to Rs 32,000 per 10 gm. It now stands at Rs 31,885 per 10 gm.
"I have had to rework my budget, reduce the number of ornaments and even recycle some of my existing gold," she says, frowning. "Fifteen per cent of my wedding jewellery will now be made from recycled gold."
The rising price of the yellow metal has sent tremors through the industry and the community of buyers.
Comparing year-on-year figures, jewellery designer Rani Oza says 30% more people, especially the families of brides- and grooms-to-be, are recycling old family jewellery to avoid buying gold at current rates. Market analysts say the demand for gold jewellery in India has fallen by 30% over the past year and will continue to slide if prices don't stabilise or decline.
So far, those worst affected - in addition to the consumer, of course - are goldsmiths, the workmen who produce the finished products. Paid per piece, their earnings have fallen by 60% as volumes dropped, says Pratap Das, president of the Bengali Swarna Shilpi Kalyan Kendra. Some have left the city, often forced to flee by mounting debts.
"If things don't improve by end-October, I will return to my village in West Bengal," says goldsmith Alok Samanta, who has worked at Zaveri Bazaar for eight years. "It is not feasible to continue living in such an expensive city when our earnings are so low."
(* Name changed as the bride did not want these details to embarrass her family)