The sustained rise in the price of gold has a profound adverse effect on retail housing

Mumbai, Ta. August 27, 2019, Tuesday

Jewelry retailers are seeing an impact on retail prices due to the continued rise in gold prices. As the US-China trade war and economic downturn have led to a steady rise in gold prices, investors are turning to gold in the global market.

Due to global high prices, the domestic market has surpassed Rs 5 per gram of gold. Gold prices have seen a steady rise since May of this year. Retail consumers are buying only when the need is high, sources in the local jewelery market said.

Retail investors are currently postponing the purchase of gold, especially coins. If prices remain so high, demand may be affected in the coming festive season, sources said.

Whatever is currently purchased for gold, the need is being fulfilled for occasions like weddings. Sales of jewelery have declined by 5% in the current year compared to the period from May to August last year, market circles say.

Jewelers are experiencing a 2 to 4 percent decline in the sale of gold and silver jewelry and artifacts for the Ganesh idol as a result of the high price of gold with the economic downturn. The order from Ganapati Mandal was also reported to have dropped this year. In addition to wanting to buy gold, retailers are expecting a correction in gold prices. Currently retailers are choosing to sell old jewelry instead of buying gold or adopting new buying strategies.

Since January this year, the price of gold has increased by 3 to 5 percent. In August alone, prices increased by seven to eight percent. India's annual demand for gold is around 5-7 tonnes. Demand may be reduced if higher prices are maintained.