Indians sell 50 tonnes of old gold in three months, says report. Here's why

Instead of exchanging old jewellery for new ornaments, many are choosing to sell it for cash and lock in profits.

Indian households are increasingly selling old jewellery instead of holding on to it, amid concerns that gold prices may have peaked.

Gold futures recovered from early losses to trade higher on Tuesday. (Pexel)

Nearly 50 tonnes of old gold were sold during the April-June quarter, a 43 per cent increase from a year ago, according to a report by The Economic Times, citing data from the India Bullion & Jewellers Association (IBJA).

According to the report, many consumers believe gold prices could fall further after touching around ₹1.4 lakh per 10 grams recently. Instead of exchanging old jewellery for new ornaments, many are choosing to sell it for cash and lock in profits.

"Indian consumers are leveraging the high price of gold for liquid cash. Though prices have fallen from a high of ₹1.8 lakh per 10 gm in the beginning of the year to ₹1.4 lakh, there is a fear among them that prices may further crash to ₹1.2 lakh, which is prompting them to sell gold to encash," Surendra Mehta, National Secretary at IBJA, told ET.

Gold futures rise to ₹1.42 lakh/10g on Tuesday

Meanwhile, gold futures recovered from early losses to trade higher on Tuesday. According to PTI, gold futures for August delivery on the Multi Commodity Exchange (MCX) rose ₹196, or 0.14 per cent, to ₹1,42,598 per 10 grams, after settling at ₹1,42,402 per 10 grams in the previous session.

Market analysts attributed the recovery to investors reassessing the US Federal Reserve's interest rate outlook amid continued geopolitical tensions and volatile crude oil prices. PTI reported that international gold prices also edged higher, with Comex gold futures trading at USD 4,044.80 per ounce.

However, uncertainty remains after Iran reiterated its intention to retain control over shipping through the Strait of Hormuz, a key global oil transit route, Chainani added.

Investors are anticipating the possibility of three interest rate hikes this year by the US Fed, with focus shifting to upcoming jobs report for further cues on the central bank's policy path and near-term direction for precious metals, Renisha Chainani, Head of Research at Augmont, said.

(With inputs from PTI)