The Hindu Business Line : Long queues outside jewellery shops, now to sell

Mumbai, Feb. 20 People have found a golden opportunity in the sharp rise in bullion prices. Even as gold jewellery buyers seem to have almost vanished in thin air, there are long queues outside jewellery shops which buy back old gold ornaments.

Mr Nitendra Jain, Proprietor, Jugraj Kantilal & Co, one of the largest buyers and sellers of gold and silver ornaments in Zaveri Bazar, the hub of gold trade in Mumbai, said, “We have been witnessing huge crowds who have come to sell their gold jewellery for the last ten days and expect it to increase if gold prices continue to rise.”

Without revealing the quantity of gold bought back, Mr Jain said, “We are open from 11.30 a.m. to 6.30 p.m. and buy back whatever people offer to us. Our rates are one per cent lower than the market price for gold.”

Mr J.A. Khan, who was the last in a serpentine queue outside Jugraj Kantilal & Co, said, “Though currently there are no attractive investment options, I decided to sell some of my old family jewellery as I feel the prices have peaked and may take a beating in the short term.”

Mr Khan, who was earlier involved in the jewellery business, said he would invest a portion of the proceeds in mutual funds and fixed deposit schemes.

Gold prices crossed the Rs 15,500-level to an all-time intra-day high of Rs 15,545 for 10 grams, but ended at Rs 15,490 on Wednesday. It gained further on Thursday and closed at Rs 15,660 on Friday.

Mrs Shrikant Shreelekha, homemaker, said, “I was initially reluctant to sell my old jewellery, but then thought it is the right time to do so. I plan to go in for a new design later when prices fall. I had bought these jewels when gold was hovering around the Rs 8,000 to Rs 9,500 level.”

Demand down

Jewellery shops which do not buy old jewels wore a deserted look despite the peak wedding season round the corner. Mr Kiran Dikshit, Manager, Tribhovandas Bhimji Zaveri, said casual buying of gold, particularly for investments and gifting, was just not happening, but compulsory buying, especially for weddings, was taking place.

“In fact, some people have advanced their jewellery purchases, anticipating that prices will go up further,” he added.

Mr Prithviraj Kothari, Chairman, Riddhi Siddhi Bullions, said retail jewellery sales had slowed down and wedding demand was low compared to last year. Mr Harish Galipalli, Head of Research, Karvy Commodities, said gold prices are no longer determined by demand and supply but by investment demand and variations in rupee-dollar value.

Since prices have risen by 20 per cent in the last one month, a sharp fall is expected in the near future before an upward march again.