At Zaveri Bazaar, all that glitters weighs on buyers

Record spike in gold and silver prices keeps customers away as jewellers idly wait for business to shine again

MUMBAI: On Friday afternoon, Mayur Jain found himself idly watching a street-side scuffle between a handcart puller and a biker from behind the glass doors of his jewellery shop on Dagina Bazaar lane in Zaveri Bazaar. On most days, Jain is busy handling customers, but a slump in footfalls has forced his gaze to the street.

At Zaveri Bazaar, all that glitters weighs on buyers

After Thursday’s record spike in bullion prices – gold came close to ₹2 lakh per 10 gm and silver breached ₹4 lakh per kg – the lull in Zaveri Bazaar was pronounced on Friday. Prices of the precious metals had tumbled – gold was ₹1.60 lakh per 10 gm and silver ₹3.38 lakh per kg – but customers were yet to recover from the previous day’s jolt, preferring to wait and watch.

Zaveri Bazaar is the bustling heart of Mumbai’s jewellery trade, a hub choc-full of century-old retailers, wholesalers and manufacturers dealing in gold, silver and precious stones. On a typical day, an air of nervous excitement envelopes the narrow, crowded lanes, near Crawford Market in South Mumbai. But, on Friday, Jain said, “an item that earlier cost ₹2,000 now costs ₹10,000. Nobody is buying.”

The wedding season is far from over but the subdued mood at Zaveri Bazaar was hard to miss. Kumar Jain, president of the India Bullion Jewellers’ Association, said, “On any other day, there would have been at least 15 customers in my shop in the afternoon. But today there are just two.”

Nilesh Shah, a diamond businessman, is a regular customer at the Umedlal Tilokchand Zaveri shop. The gold jewellery store opened in 1925, when the price of the yellow metal was ₹18.75 for 10 gm, according to a chart in Jain’s jewellery shop.

Shah bought four 10-gm gold coins earlier this week. A firm believer in gold as an investment, he made a purchase even on Thursday, when prices shot through the roof. “I bought a 2-gm coin, not a 10-gm coin. If you are a regular buyer, you must not hesitate to buy even at Thursday’s rate.”

The advice works if you can afford it. A burqa-clad woman walked into the Shah Kaluram Jodavat and Company shop with the ease of a regular. “I need a half-gram gold coin. Fatafat (quickly)!” she demanded. Lalit Jodavat, the owner, told her regretfully that he only had 1-gram coins. After asking how much that would cost, she said in Gujarati, “Looks like I have enough for only half a gram.” She left in a huff.

Gold has been on a tear for the past six months as investors gravitate towards the precious metal, considered a bulwark against economic and geopolitical uncertainty. In the last four days, however, prices have risen very sharply, making investors cautious, says Kumar Jain.

And it’s not only buyers; customers interested in selling too are holding back. Naresh Munot, who has been in the gold and silver business for 38 years, says, “On Friday, silver fell to ₹3.38 lakh per kg. Those who came to sell expecting Thursday’s rates were disappointed and turned back.”

Nitin Kisan Yale too is sorely disappointed. He’s worked at the Shree Radha Melting Centre for 35 years, an outfit among many in Dagina Bazaar that melts gold and silver jewellery, bullion and coins at ₹100 per kg. It was past 4 pm on Friday when Yale received his first customer of the day. “He melted 600 grams of silver. That was my only customer today. The market is quiet,” says Yale.

Most jewellers on Dagina Bazaar believe the quiet spell will continue on Monday. Some even expect prices to rise further but, they predict, just like the stock market eventually does, the gold and silver market will stabilise in a few days.

Ghanshyam Nichani, a certified jewellery valuer and a gold bullion businessman, remarks, “Records are always broken. In the 1980s, nobody could have imagined today’s prices. Returns take time, you have to be patient.”