Volatility in gold prices has not only impacted buyers but has also led to a severe dip in the betting turnover.
Illegal betting on the opening and closing of gold prices is heavily practiced in the city, on the day after the markets are closed.
Some also indulge in forward trading, where bets are placed on gold prices touching a new mark on a future date, or during festival and marriage season.
Insiders say that the illegal betting market has witnessed a dip of about 25% this month, after gold prices started becoming volatile since early August. When the prices are stable, the market sees daily betting to the tune of Rs725 crore.
"Many people suffered losses as gold prices jumped unexpectedly on so many occasions this month," said a bullion dealer from Zaveri Bazaar, who also places bets on gold prices, adding that in the last few days, there had been a big plunge in prices of the yellow metal.
"Punters (those who place bets) were already confused with the steep rise, and then the sudden fall added to it," a bullion trader at Malad said.
Areas such as Zaveri Bazar, Nariman Point, Bandra-Kurla Complex and Malad are the hubs of the illegal betting market, which operates at night.
Insiders say that even though there is no actual purchase of gold, punters place bets on hundreds of kg of the yellow metal everyday. The illegal betting market witnesses dealing in close to 3,000 kg gold daily.
"The punters are mostly from the bullion trade and jewellery market, who speculate the opening and closing price of gold," the trader said.
A punter stands to win if gold opens and closes on the price predicted by him, or an amount lesser than that.
"In that case, he earns the difference between the previous day's closing price and the next day's opening or closing price, on which he had placed a bet," the trader said.