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Gold sales dip by 50% in Mumbai despite wedding season

Mumbai Jewellers Association said daily sales have reduced from an average of Rs 175 crore to just Rs 88 crore

mumbai Updated: Nov 30, 2017 10:47 IST
Naresh Kamath
Naresh Kamath
Hindustan Times
Mumbai,gold,wedding
The association claimed it used to generate at least Rs175 crore in daily sales, which peaks at Rs350 crore during occasions such as Dhanteras, Dusshera and wedding season(Representational photo/HT file)

Looks like the yellow metal has lost is allure. Despite the ongoing wedding season, traders have reported a drop in sales by 50% this year. This translates into a decline of sales to Rs88 crore from the daily average of Rs175 crore.

Traders said economic slowdown, rise in prices of essential commodities, low cash transactions clubbed with fear of inquiry from Income-Tax department have kept the buyers at bay.

According to Mumbai Jewellers Association, the daily sales have reduced this time due to multiple factors. “People no longer have huge cash in hand, as most have deposited it in the banks following demonetisation. They are also afraid to deal in cheque, as they feel these transactions might attract scrutiny from the I-T department,” said Kumar Jain, vice-president, Mumbai Jewellers Association.

There is mandatory Know Your Customer (KYC) clause for purchases above Rs 2 lakh and above for which a buyer has to furnish PAN card details. Also, most buyers are opting for exchange of gold (trading old for new) to escape I-T scrutiny.

Although the Centre has revoked the mandatory KYC under the Prevention of Money Laundering Act (PMLA) while buying gold worth Rs 50,000 and above, after a steep decline in even small transactions, sales remain sluggish.

The association claimed it used to generate at least Rs175 crore in daily sales, which peaks at Rs350 crore during occasions such as Dhanteras, Dusshera and wedding season. However, the sales have fallen by 50%.

Another reason, the association claimed, was the price rise of day-to-day commodities. “Currently, households are burdened with escalating prices of essentials and EMI’s. Gold is a luxury and has now become the last priority,” said Pankaj Kothari, owner, Palak Jewellers at Parel.

First Published: Nov 30, 2017 00:01 IST