Gold: Losing its lustre
At current price levels, consumers do not seem to be charmed by gold. The import of the yellow metal has declined substantially since January this year if Bombay Bullion Association figures are anything to go by. In the six months since January, India imported 162.20 tonnes of gold as against 313 tonnes during the same period last year—that’s a staggering 48 per cent drop.
However, jewellers don’t agree their businesses are suffering. The transactions, they say, have gone up in value terms, if not volume terms.
According to one jeweller, fashion jewellery, for which there is a growing demand, requires more of add-ons like gems and stones, and not much of gold. That pushes up the value of the product, even if it has less of gold. Also, the number of people trading their old jewellery for a new piece has gone up as they don’t want to buy gold at the prevailing prices. And you thought the demand for gold—at least in India—was price inelastic!
—K.R. Balasubramanyam
