Retail customers are shying away from gold but it’s a passing phase
EVEN ON FRIDAY, THE PRICE OF 24 CARAT GOLD AT R3,324 PER GM AND 22 CARAT AT R3,128 PER GM, SPELT TROUBLE
FOR RETAIL BUYERS
Gold biscuits, lockets and gold chains with intricate designs on display They were giving the retail buyer an incentive equal to that of their onemonth’s EMI. Though there isn’t any such incentive on offer now, the jewellers, to combat the ever-increasing gold price, have taken recourse to saving gold, on behalf of the retail customer, every month and after the completion of the one-year tenure the retail buyer will find that he/she has saved more gold than what the total amount of money that he has saved in 12 months could have bought. In the process small retail customers stand to gain.
“Gone are days when we used to ask clients to pay installments for 12 months and redeem it on the 13th month. Now we are asking customers to pay installments and save gold with us.
“If you want to buy an ornament on the 13 month you are sure to benefit,” said Chandrakanta Roy Choudhury, the owner of a reputed jewellry chain.
Nandita Sarkar, 55, is feeling the heat of the rising gold price. Her son Joydeep’s marriage is fixed on January, 2013, and she can do little to escape the galloping gold price.
“My son is getting married in winter, so I have to buy gold now. Without gold marriage remains incomplete. But because of the hike in gold price we are trying out alternatives.
“May be I would be going for the hollow, instead of solid gold bangles,” said Sarkar, who is yet not sure when she could buy the ‘hollow’ ones.
“It like you’re gambling. I am waiting, hoping that the price will fall. But, what if the price rises further? I would have benefited had I accepted the scheme before,” lamented Sarkar.
Even on Friday, the price for 24 carat gold at R 3,324 per gm and 22 carat at
R 3,128 per gm, spelt trouble for retail buyers.
“The price of gold touched historical high on September 6 when it was
R32,300 per 10 gram on the Multi Commodity Exchange. The price has
gone down since but the dip is not considerable at all,” says Bhavik
Ajmera owner of a Burrabazar-based jewellry shop. With panic setting in
among the retail customers, who are reluctant to buy gold at a high
price, the jewellers have already started feeling the pinch. Sale of
gold has decreased by 25% in the city.
“Diwali is round the corner followed by the peak marriage season — from end November to February. This is the ideal time to buy gold. I would not say we are running short of customers. But the quantity of sale has dropped considerably,” said Arup Dutta the owner of a popular gold shop in Gariahat.
Jewellers admitted that now-a-days customers sought gold chains or bangles with less gold content in those. Accordingly, they were changing their designs. “If you want to sale ornaments low in gold content you have to make them as small as possible. You will also have to be very perfect while designing and carving a small piece of ear ring or gold chain,” said Chandan Ghosh owner of a Bhawanipore based jewellry shop.
The drop in sales means jewellers are going slow on their gold purchases as well. “Our daily sales to jewellers has dropped to onefourth since Friday,” says Harshad Ajmera who sells gold bars to jewellers and investors.
But the total business of the big jewellry shops has not been affected. Owners of the big jewellry shops said, their loss was being compensated by investors who expect the price to rise further. “The investor demand has shot up by 50 per cent since early September,” said Ajmera.
According to the dealers in gold, the fluctuations in the US and European economy are responsible for the hike in gold price. “Big-ticket investors are now investing in gold. And when America’s credit rating came down to 2A+ from 3A+ it resulted in the gold price shooting up further,” said Pankaj Parekh, chairman, eastern region, Gem and Jewellery Export Promotion Council.
In fact the drop is sale of gold has had an adverse affect on the sale of gemstones too. Coloured gemstones are used to give a fashionable look to jewellry. Since gold demand has plummeted, it has affected the overall sale of coloured gemstones.
“The demand for gemstone has been low in the last two months as gold jewellry sale has dropped by around 20%. Gemstone prices, however, have risen as imports have become costlier due to a weak rupee,” said Rahul Agarwal, a gemstone dealer.
Experts said that they, however, were not worried by the dip in sale of gold. They felt that people would get accustomed to the increased price in a short while.
Roy Choudhury explained that in 1991 the price of gold was R300 per gram; within two years it reached
R545. In 1998 the price was hovering around R900 and it suddenly reached
R1,100 per gram in 2000. “It was the same situation, as the one we are experiencing now, in 1991-92 and again in 1998-99. There was dip is sale with the rise in gold price. But post 2001 people started buying gold again. It would take time but sale of gold will increase sooner or later,” said Roy Choudhury.
“Diwali is round the corner followed by the peak marriage season — from end November to February. This is the ideal time to buy gold. I would not say we are running short of customers. But the quantity of sale has dropped considerably,” said Arup Dutta the owner of a popular gold shop in Gariahat.
Jewellers admitted that now-a-days customers sought gold chains or bangles with less gold content in those. Accordingly, they were changing their designs. “If you want to sale ornaments low in gold content you have to make them as small as possible. You will also have to be very perfect while designing and carving a small piece of ear ring or gold chain,” said Chandan Ghosh owner of a Bhawanipore based jewellry shop.
The drop in sales means jewellers are going slow on their gold purchases as well. “Our daily sales to jewellers has dropped to onefourth since Friday,” says Harshad Ajmera who sells gold bars to jewellers and investors.
But the total business of the big jewellry shops has not been affected. Owners of the big jewellry shops said, their loss was being compensated by investors who expect the price to rise further. “The investor demand has shot up by 50 per cent since early September,” said Ajmera.
According to the dealers in gold, the fluctuations in the US and European economy are responsible for the hike in gold price. “Big-ticket investors are now investing in gold. And when America’s credit rating came down to 2A+ from 3A+ it resulted in the gold price shooting up further,” said Pankaj Parekh, chairman, eastern region, Gem and Jewellery Export Promotion Council.
In fact the drop is sale of gold has had an adverse affect on the sale of gemstones too. Coloured gemstones are used to give a fashionable look to jewellry. Since gold demand has plummeted, it has affected the overall sale of coloured gemstones.
“The demand for gemstone has been low in the last two months as gold jewellry sale has dropped by around 20%. Gemstone prices, however, have risen as imports have become costlier due to a weak rupee,” said Rahul Agarwal, a gemstone dealer.
Experts said that they, however, were not worried by the dip in sale of gold. They felt that people would get accustomed to the increased price in a short while.
Roy Choudhury explained that in 1991 the price of gold was R300 per gram; within two years it reached
R545. In 1998 the price was hovering around R900 and it suddenly reached
R1,100 per gram in 2000. “It was the same situation, as the one we are experiencing now, in 1991-92 and again in 1998-99. There was dip is sale with the rise in gold price. But post 2001 people started buying gold again. It would take time but sale of gold will increase sooner or later,” said Roy Choudhury.