Gold Price Today: Precious Metal Skyrockets, Jewellers Worried As Number Of Buyers Dip Drastically

Gold sales in India experienced a significant decline in June, plummeting by 60% compared to the previous year, reaching just 35 tonnes. This marks the most substantial drop in volume since the Covid-19 pandemic. The India Bullion & Jewellers Association (IBJA) attributes this decline to high and fluctuating gold prices, which have deterred buyers.

Despite efforts to boost demand through discounts and freebies, the volume of gold jewellery sales has not increased. Surendra Mehta, IBJA's national secretary, mentioned that many gold jewellery manufacturing units across India have reduced their production by nearly half due to the lack of demand.

Price Volatility and Market Trends

The price of gold continues to be volatile in July, with no signs of a decrease so far. On a recent Monday, gold prices surged by Rs.600 per 10 grams, surpassing the Rs.98,000 mark. Consumers at the retail level are now paying Rs.1,00,997 per 10 grams, inclusive of a 3% GST. This price excludes wastage and making charges.

Jewellers are adapting to these market conditions by promoting 14-karat gold jewellery as a more affordable alternative to the traditional 22-karat pieces. The lower price point of 14-karat gold makes it an attractive option for buyers looking for cost-effective yet elegant jewellery options.

International Influences on Gold Prices

Globally, gold prices have been on an upward trajectory due to renewed trade tensions initiated by US President Donald Trump's threat of additional tariffs on the European Union and Mexico. Although Trump has left room for negotiations until August 1st, the possibility of rapid escalation has pressured risk assets and driven investors towards safe-haven assets like gold.

The trend towards 14-karat gold is gaining momentum in India, especially among younger consumers who value its durability and affordability. Jewellers anticipate that this trend will continue as demand for lightweight and elegant jewellery pieces grows.

Efforts for Hallmarking Expansion

The Gold Merchants' Association has engaged in multiple discussions with the Bureau of Indian Standards (BIS) regarding hallmarking facilities for 9-karat gold. Currently, hallmarking is available only for 24-, 22-, 18-, and 14-karat gold jewellery.

The ongoing volatility in gold prices suggests that there may not be an immediate recovery in demand.