With gold priced at Rs 18,670 per 10 grams, few Mumbaiites are buying gold even as the festival season draws near.
City jewellers say it’s the speculators who are pushing the price upwards by dealing in huge quantities of paper gold, that is, by buying and selling gold on paper like shares.
“The demand in the jewellery market is 5 to 10 per cent of what it should be at this time. The sale of gold has gone down by 70 per cent as compared to sales figures in August last year,” said Kumar Jain, vice-president of Mumbai Jewellers’ Association, who owns Umedmal Tilockchand Zaveri jewellery store at Dagina Bazar. He said heavy speculation is affecting demand.
“There is hardly any physical sale of gold.”
Pankaj Bafna, who owns Padmavati Jewellers in Dagina Bazar, said speculators are making gold unaffordable for the layperson. “The old saying that gold will remain only with the rich is coming true,” he said.
According to Jain, it’s around this time of the year that people start buying gold. “People start shopping for weddings as the season begins after Diwali, but so far we have not any customers,” he said.
Last year, at this time of the year, gold cost around Rs 15,500 per 10 grams.
Local jewellers and bullion traders said prices are also steadily rising because of the India International Jewellery Show (IIJS), which will be held at Goregaon from Thursday to Monday.
A large number of national and international traders attend the show and this is expected to increase demand.
“The IIJS is one of the reasons for the high price of gold as it pushes up the demand,” said Nemichand Sanghavi, owner of Raksha Bullion in Zaveri Bazaar and one of the directors of Bombay Bullion Association.
Mumbaiites are hoping prices come down soon. “I have a wedding at home in November, but I have not been able to buy jewellery as the price is out of reach,” said Komal Sharma, a Santacruz resident.
“If it does not come down, I will have to settle for lesser quantity.”
Akshay Joshi, a software engineer, wanted to gift his sister a gold chain on Raksha Bandhan, but he’s not sure he can afford it.
“At the current rate, I won’t be able to afford a good gold chain. It is better to go for a good mobile phone or something,” he said.