Wedding demand turns yellow metal hotter in Ahmedabad

AHMEDABAD: If sales figures are anything to go by, skyrocketing gold prices appear to have had very little impact on jewellery sales. Monday did not buck the trend either, with yellow metal being sold at Rs 34,535 per 10g. Happy jewellers thank the ongoing wedding season for rising demand.
“Despite high prices, demand for gold jewellery has been good, mainly due to the ongoing wedding season.We expect purchases to remain good for another month, before the Holashtak or inauspicious period sets in,” Manoj Soni, a city-based jeweller, said.
Interestingly, buoyant demand for gold jewellery is hardly reflected in the metal’s import figures. According to Ahmedabad Air Cargo Complex data, imports figures stood at 0.839 metric tonnes (MT) in January, a decline of 68.4% against the same period last year. Similarly, gold imports also declined month-on-month by 77.74%, against 3.77 MT imported in December 2018.
“The first half of January hardly saw any purchases due to the Kamurta period, again an inauspicious period, during which gold sales decline considerably. Therefore, the higher sales can be mainly attributed to recycling of gold. More than 50% of purchases have involved exchange of old jewellery, bars and coins, with people trying to avoid paying high prices for gold,” said Jigar Soni, vice-president of the Jewellers Association Ahmedabad.
Analysts, however, attribute declining imports to the increased smuggling. “Whenever prices go up, illegal procurement of gold through unofficial channels also rises. When huge volumes of gold come in through illegal means, duty-paid imports will obviously dip,” said Haresh Acharya, national secretary of the Bullion Federation of India.
High gold prices have also affected the bullion market. “Gold prices are firming up in the international market and due to the depreciating rupee, gold is getting even more dear in the Indian market. No investor will readily buy gold at such a high price. This demand is thus driven mainly by jewellers,” Acharya added.