Jewellery sales drop as gold price flares up

Jewellers say there may not be any significant drop in prices in the near future

The Russia-Ukraine crisis has pushed the price of gold to record level on Wednesday. As the price of the yellow metal continues to fluctuate, footfalls have dropped sharply at the jewellery stores in the city.

The price of one gram of 22-carat ornament gold touched ₹5,105 on Wednesday. It later dropped to ₹5,020 by evening. Jewellers said that many customers deferred purchase of gold jewellery due to the price volatility.

Jayanthilal Challani, president, Jewellers and Diamond Traders’ Association, Madras, recalled that the price reached its peak in August 2020 when it was spurred by the COVID-19 pandemic. The constant swing in prices now had affected business that was looking up after the pandemic. Business is usually dull during summer and the rising price has led to further drop in sales, he added.

Jewellers said that many stores witnessed only 50% of their normal sales for the past few days. L.K. Syed Ahmed, chief advisor, Tamil Nadu Jewellers Federation, said the fluctuation in the global market was a reason for the unstable prices.

Many purchases happening now in the city were through exchange of old gold jewellery. Several customers were waiting for the prices to drop. Gold is still considered a safe investment, Mr. Ahmed pointed out.

Jewellers said there may not be a significant drop in the price of gold for the next few months unless there was a major change in the global situation. As production cost was high, gold prices may fluctuate a little.