Sales of gold and gold jewellery have come down by 75 per cent in Gujarat due to spiralling prices of yellow metal in past two to three months. Jewellers fear a major blow to their business if the gold prices continue soar.
"Market is just 20-25 per cent compared to yearly average sale of gold and jewellery as gold price raising since last couple of months. Even marriage season has done little to lift our business," said Manoj Soni of AB jewels from Ahmedabad.
Gujarat's average gold sale is estimated at about 200-225 kg per day but the sales have dipped to 40-50 kg per day at present.
"Instead of buying gold jewellery for cash, the consumers now exchange old gold ornaments for new jewellery. This happens even during marriage season. At present in Rajkot average sale is about 4-5 kg per day," said Balavant Badani, president of Rajkot Gold Dealers Association.
The recovery in demand is subjected to gold prices hitting below Rs 18,000 10 gram or good monsoon, he said.
Gold was traded in the range of Rs.18,900-19,100 during last week in Gujarat and it crossrd $1250 per ounce mark in the international market.
According to market analysts gold prices are on a constant rise since the begining of the year in the wake of European crisis making investors flock towards the yellow metal as gold is considered to be a traditional safe-haven investment.
Gold prices have gained around 14 per cent on a year-to-date basis. Even the major central banks of the world are adding gold to their reserves to stay insulated in times of financial uncertainty. The Central Bank of Russia bought another 26.6 tonnes of gold over the past quarter, the World Gold Council reported.
The official gold holdings of the central bank now accounts to 668.6 tonnes or 5.5 per cent of its total reserves. The Philippines central bank bought 9.5 tonnes of gold, taking its gold holdings to 164.7 tonnes or 13.7 per cent of total reserves.
