High gold prices seems to have sent shivers down the spine of gold jewellery retailers across Gujarat. Increased volatility in prices of gold has taken its toll on the demand and sales of gold jewellery. As per market players, overall gold jewellery business has plummeted to 40 per cent.
Gold jewellery market has seen a drastic fall in the demand. "Currently, the business has declined to 40 per cent. The gold prices in the last two months have ranged between Rs. 15,000 per 10 grams to Rs. 16,000 per 10 grams. The main problem currently is of high volatility in gold price. In the wake of sharp movement in prices, buyers are refraining from buying in anticipation that prices would stabilise in days come", said Kantibhai Ranpara, secretary, Rajkot Gold Dealers' Association.
According to him, resale of gold and gold jewellery has increased due to record gold prices. In many cases, consumers prefer to buy new jewellery by selling old jewellery held by them.
"I have never seen such a dramatic reduction in gold jewellery sales. Earlier, the footfall in our showroom used to be around 80 to 90 customers, which has now dipped to paltry 8 to 10 buyers a day", said Girish Gandevikar, Girishbhai Gandevikar, president, Vadodara Jewellers Association. Gandevikar owns 25,000 sq. ft jewellery mall in Vadodara.
Even the marriage season failed to add glitter to gold jewellery market. "High gold prices led to value based buying during marriage season. Instead of going for 10 grams or 50 grams gold jewellery, customers have started buying gold as per the available budget. This has led to fall in volumes", said Shantibhai Patel, Shantibhai Patel, president, Gem and Jewellery Trade Council of India (GJTCI).
Chandrakant Sanghvi, regional convener for Gujarat, Gems and Jewellery Export Promotion Council (GJEPC) admitted that gold jewellery buyers are refraining from buying gold jewellery. "In case of many retailers, sales of jewellery having high ratio of gold have gone down", he added.
"Being the last of Month of fiscal year, gold jewellery sales tend to slow down in March but this year the fall in much more as compared to last year. Liquidity crisis has further added to the woes of gold jewelllery retailers", he said.
