Jewellers see a surge in consumers parting away with their family jewellery and artefacts than fresh buying as they face a financial crunch due to economic slowdown.
"Jewellery sales are tepid as approximately 70% of customers frequenting Zaveri Bazaar are coming to sell their old jewellery to tide over the financial distress caused by the coronavirus, Kumar Jain, Vice President Mumbai Jewellers Association told Moneycontrol, adding that the trend is seen across the country.
"Clients who have weddings in their family are exchanging scrapped and old gold jewellery with new ornament while fresh jewellery sales are very minimal", Jain added.
Jain said that the Association had requested the Maharashtra government to change the shop timing from current 0700-1600 hours to 1000-1900 hours to avoid business loss as buyers prefer to visit stores in the evening hour.
Manisha Gajane (50) housewife from Khetwadi, Mumbai came to part away with her 20 grams of jewellery to pay her son’s education fee as she faces financial problems. She added that the prices are hovering near Rs 50,000 and finds hard to service loan had she opted to mortgage gold in the current uncertain future.
In the domestic market, bullion prices rose marginally by Rs 105 to Rs 47,951 per 10 gram on safe-haven appeal due to a surge in Delta variant of coronavirus that has slowed economic recovery.
The price of 10 gram 22-carat gold in Mumbai was Rs 43,923 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,951 plus GST. The 18-carat gold quoted at Rs 35,963 plus GST in the retail market.
Investors will look forward to US inflation data that could influence the Federal Reserve’s timeline for easing its bond purchase. While Fed chief Jerome Powell is slated to testify before Congress on Wednesday and Thursday.
Gold prices recovered ahead of US FED chairman's testimony this week and key US inflation data due today. The weaker dollar also supported yellow metal to trade up for the day. At MCX, rupee appreciation capped the upside in gold prices compared to gains in COMEX prices, says Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
The US dollar traded higher at 92.31, up 0.06 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund dropped by 2.91 tonnes to 1,037.28 tonnes. The ETF has a market value of $59.76 billion.
Also read: Gold loan defaults rise after COVID-19 second wave, drop in prices
“Gold prices edged higher after hitting a one-week low in the previous session, ahead of U.S. inflation data that could signal further clues regarding the Fed's next move. Fear regarding the new variant of coronavirus 'Delta' increased as the G20 meet raised concerns regarding the same. WHO director also in his speech showed concerns regarding the infectious Delta variant that is becoming dominant and many countries are yet to receive enough vaccine doses to protect their health workers,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The gold/silver ratio currently stands at 69.59 to 1, which means 69.59 ounces of silver is required to buy an ounce of gold.
Silver prices advanced Rs 320 to Rs 68,905 per kg against its closing price on July 12.
The value of August and October’s contracts traded so far is Rs 2,113.84 crore and Rs 200.75 crore, respectively.
Similarly, Gold Mini contract for August rose by Rs 141, or 0.30 percent at Rs 47,909 on a business turnover of 13,874 lots.
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