Dearer gold dampens festival buying

A walk down the crowded Bada Bazar in Berhampur, one of the biggest bustling jewellery markets in the state, during business hours would usually see hectic activity. But that unfortunately is missing nowadays.

Zooming gold prices have put a dampener on gold purchases in spite of this being a festive season with the celebration of Ganesh Puja and Nuakhai.

The gold of 0.99 fineness or bullions, generally known as biscuit gold, touched Rs 9,700 per ten gram in Berhampur while the price of 22 carat gold, generally used for making of jewellery has been hovering at Rs 9,200 per ten grams. The price of the gold has climbed to a new high in last two decades and increased about 15 percent in the last one month.

"With the gold prices spiraling the customers are not coming to buy jewellery unless there is some urgency", sys P.Satya Narayan Senapati, the president of the Berhampur Jewellers' Association (BJA).

"The business is dull and has dropped by 30 to 50 percent since the price rise", he added. He attributed this phenomenon to the rise in the price of the yellow metal in the international market.

The US Federal Reserve's move lowering the benchmark rate by half a percentage point to 4.75 percent has also contributed its bit in soaring of the gold price in the Indian markets, he stated.

Berhampur gold market generally depends on the bullion markets of Mumbai to procure the gold biscuits and ornaments. The gold merchants here are regularly in contact with their counterparts in Mumbai to fix the gold rate.

"We are depending on the Mumbai market to fix gold rate at opening and closing times of every business day" said another gold merchant. In Berhampur, over 100 shops are engaged in gold bullion and ornament business.

While entire south Orissa is depends on the Berhampur market, the gold buyers from other parts of the state also flock here to purchase because of the assurance of quality of the metal and availability of variety of choice, claims E.Shankar Narayan, another merchant.

Normally at such high rates, a lot of gold ornaments and scrap come in for re-making. But the buyers suspend purchase decision till a reaction comes in and lower prices are obtained or there is some semblance of stability, said E.SN Subudhi,

He however hoped the gold ornament business in the city would pick up in the coming month with the wedding season and Dassehra puja round the corner.

"Our buyers are generally need-based buyers and only purchase at the time of requirement and after the harvest of the crop", Senapati said.