Picture used for representational purpose only
Industry estimates suggest that the resale of old gold has increased by 200% in the same period, as gold prices rallied.
“The international price of gold has been high since June and after the customs duty hike it went further up. While jewellery sales dropped, as the gold price kept increasing week after week, customers began selling old gold bought earlier at a lower price,” said Manoj Soni, an Ahmedabad jeweller.
“Till mid-June, old gold sale accounted barely 10% of the total gold sales in a day. For example, if I sold 1kg gold in a day, the quantity of old gold sold to me would be barely 100g. However, the trend has reversed now. The amount of old gold sold by customers is three times the sale of gold I make. This is hurting revenues to a great extent,” he added.
On Wednesday, gold prices in Ahmedabad touched a new high, settling at a record Rs 38,200 per 10 gram of 24 carat gold.
“Gold prices went up on global factors such as escalating tensions between US and China, with the US president’s announcement of imposing fresh tariffs on Chinese imports. Moreover, Indian currency has depreciated against the US dollar while the equity markets here have also been down,” said Haresh Acharya, director, India Bullion and Jewellers’ Association (IBJA). “The demand for gold has taken a major hit. Jewellers who used to purchase close to 40kg gold from my bullion trading firm are now hardly buying 3-4kg,”
Jewellers said that liquidity crunch, especially in businesses, is also forcing people to sell off gold. “Businessmen and middle-class families are facing cash flow issues. For them, selling gold is a viable option to address instant liquidity problems. Apart from gold, many are also selling off silver,” said Rohit Choksi, president, Jewellers’ Association of Ahmedabad (JAA).