Soaring gold, silver prices dent artisans' earnings

With gold and silver prices surging across the global markets, livelihood of at least 8,000-10,000 'kaarigars' (craftsmen) - the skilled labours associated with goldsmith market in the city - is being affected by every cent rise in the circuit.

"During festival days - till Diwali - it was a boom time for us, but after Diwali our business has drastically suffered, and it is hard to manage our daily livelihood," said Sadanand Das, a craftsman who came to Rajkot all the way from West Bengal.

It is difficult to procure physical gold, which we melt and shape for jewellery purpose, from the showroom owners in Rajkot, he added.

Shooting gold prices have dented such craftsmen's monthly earnings very badly. They now earn 25 per cent of their earlier usual monthly income. "We used to earn Rs 3,000-4,500 a month, but now with the prices of gold surging daily we are able to earn hardly Rs 750-1,250 a month," said Sheikh Sahid Ul, another goldsmith.

As the prices are soaring everyday, customers are hardly buying gold, and despite the fact that the marriage season is at its peak, they are workless, he added.

Further, with the online trading in precious metals gradually becoming popular, even traders and showroom owners, who order physical delivery of gold and silver, are finding it tough to procure the metals.

"We book our orders for physical delivery keeping in view some index not at par with the online rates flashed on data screens. Thus, by the time we avail of the physical delivery of the metals, their prices have risen to a new unimaginable high. So, we have to sell our produces at higher prices or cut labour costs, as we have already agreed to order on some price-tag," said Hasubhai Saholiya of VG Jewellers.

The jewellers charge around Rs 1,000 per 10 gm of gold as labour cost for making ornaments, and in case of bulk orders, the rates are much lower and cut-off rates are passed on to the labours giving them a huge quantum of work, but post-Diwali with the prices of gold and silver having shot up, obtaining physical gold or bulk job from showroom owners has become very difficult, he added.

"During marriage season we usually work 16-18 hours daily on jewellery orders, but this year we are work just three-four hours as there is no business," said Chetan Ardeshna, a gold polisher.

According to trade estimates, Rajkot alone procures 30-40 metric tonne of silver and 2,000-2,500 kg of gold every month during the marriage season, "Rajkot-made lightweight jewellery is famous the world over, but as gold and silver prices are shooting up, orders from out of the city and out of the state have declined drastically, affecting our business," said Rajni Parekh, engaged in precious metals-related works.

Goldsmiths in the city perceive this price rise partly as a syndicated movement of the western world targeting the rising economy of our nation.

"Gold that was at $417 is trading at $540 today. Imagine the difference in transactions one has to pay for; with the existing trading patterns in international markets, transactions are registered first and physical deliveries are affected later. In case, the transaction period agreed to is in its usual T+5 pattern and later the transaction is held up, we have to pay the difference amount. So, we end up paying an extra sum of $123 to avail of the same quantity in comparison to the rates at which the consignment was booked in the past. Else, we get less quantity of gold - by nearly 25 per cent - if we transact on the same prices," Saholiya said.

"Of course, the western world trade syndicate is governing the prices, either it charges more US dollar or provides less weight of gold. It is a win-win situation for the western world trade either way," he added.

Pankaj Lodhiya, a leading precious metals importer reasoned: as there is huge demand of gold in the western markets with people having shifted their investment focus towards precious metals, the situation is what it is. Now, it has become difficult to speculate about this trade.

There is suddenly a huge demand against the routine supply, and hence, the skyrocketing of the prices of all the precious metals.

In Rajkot, despite it is marriage season now, demand for gold has reduced drastically, to 125-150 kg a month from usual 2,000-2,500 kg a month, Lodhiya added.

VICTIMS OF SPECULATION

Shooting gold prices have dented craftsmen's monthly earnings very badly. They now earn 25 per cent of their earlier usual monthly income.

Customers are hardly buying gold, and despite the fact that the marriage season is at its peak, craftsmen are workless

Goldsmiths in the city perceive this price rise partly as a syndicated movement of the western world targeting the rising economy of our nation.