 "gold and silver, silver, gold")
Gold supply from recycling of old jewellery in India has doubled in April-June quarter to claim the highest in four quarters following a sharp jump in bullion prices globally.
Data compiled by the apex industry body World Gold Council (WGC) showed, gold recovery from Indian sources at 23.8 tonnes for the second quarter of the current calendar year, over 100 per cent jump from a mere 14 tonnes from the sequential quarter of January-March. From the second quarter of the previous calendar year, however, gold availability from recycling remained almost unchanged.
Sudden spurt in sales of used jewellery indicates that farmers and usual consumers took advantage of gold price rise. Globally gold price remained elevated at above $1,350/oz translating thereby over Rs 30,500 per 10 grams in India.
"Scrap jewellery arrivals have increased over the last few months due to sudden spurt in gold prices. Both consumers and farmers are bringing in old jewellery for sale to take advantage of price increase," said Mukesh Kothari, Director, RiddiSiddhi Bullions Ltd.
Average gold price in the popular Zaveri Bazaar here jumped to Rs 29,986 per 10 grams for April-July quarter from the level of Rs 27,570 per 10 grams in the previous sequential quarter. Similarly, the average benchmark gold price in London spot market jumped to $1258 an oz for the second quarter of the current calendar year from $1,182 an oz in the previous quarter.
With the rainfalls estimated to remain above normal this monsoon season, gold recovery from recycling tends to boost as farmers sell their precious ornaments to buy seeds and fertilisers. Later they buy gold jewellery after harvesting of kharif crop.
"In India, an increase in recycling was attributed to selling among rural consumers, rather than outright selling by jewellery consumers more broadly. Weather-related events in the past couple of years have impacted rural incomes, making gold a useful source of funds with which to finance the purchase of farming products - such as seeds - for the sowing season ahead," said a report from the WGC.
The price increase in 2016 has led to a number of gold producers globally to use this as an opportunity to lock in the price they will receive for their output. The gold price is 25 per cent higher in US dollar terms, but at or above record levels in some other currencies such as the Australian dollar and South African rand.
The supply of recycled gold globally saw a 23 per cent year-on-year jump in Q2, from 267.4 tonnes to 327.7 tonnes. This increase is primarily a function of the dramatic price increase that has been witnessed so far in 2016.
The government of India has introduced Gold Monetisation Scheme (GMS) to bring in old jewellery for cash to increase supply from domestic sources.
