This wedding season, gold loses sheen

NEW DELHI: The peak wedding season has hardly brought any cheer to the city's jewellery stores. Usually packed to the hilt at this time of the year, the jewellery shops are conspicuous with the absence of customers. With gold prices surging up to around Rs 17,000 for 10gm, most jewellery shops are out of business while some big stores bank on their regular clients.
According to small time jewellers, gold sales are down by as much as 60-70%. The soaring prices have kept customers at bay as most potential buyers are sticking to their old traditional jewellery. An official of Devraj Jewellers in South Extension Part-I said, "Rising gold prices have hit the jewellery business very badly. Customers are getting new sets made out of their old jewellery. Not much trade is taking place right now because of the fluctuating price of gold, thanks to the US dollar becoming weak.''
The story is no different in Karol Bagh. Known for gold and diamond jewellery, Khanna Jewellery store's business is reportedly down by 25-30% compared to last year. "Those who have to buy jewellery for their daughter's wedding are indeed coming in. But they are only buying lighter sets that don't overshoot their budget,'' said Vijay Khanna.
The dent in the city's love affair with the yellow metal is apparent. Families are cutting costs and buying new sets only for the bride. The others are just getting old jewellery reset into new designs. "My elder sister's getting married in February but neither me nor my mother are getting any new jewellery. Our budget doesn't allow it. But since it's a tradition, we are buying a kundan set for my sister,'' said Sonali Singh, an MBA student.
But even as people avoid buying jewellery, gold is being considered a great investment option. According to an MMTC official, "There has been a 15-20% increase in solid gold buying as against jewellery. It's because of the expection of a further rise in prices. Customers are viewing gold as an investment.''
On Friday, MMTC sold gold coins at Rs 18,155 for 10gm. The scene at the bullion market in Chandni Chowk on Thursday was of disbelief, as the price of gold went up by Rs 300 overnight. Traders said that more than jewellery people will invest in solid gold. "People are expecting the price of gold might even touch Rs 18,000,'' said a trader.
National and private banks are also selling gold coins of different denominations from 2.5, 5, 10, to 100 grams. At SBI's main branch on Parliament Street the sale of gold coins hasn't been impacted. In fact, the bank has started a gold deposit scheme, where one can deposit gold and earn interest.