Kerala jewelers cash in on demand for lightweight ornaments as gold price soars

The per gram rates of gold in the country, both 22 and 24 carat, have gone through the roof in the last one year

As gold prices continue to head north, it is boom time for one-gram gold jewellers in Kerala, which has the highest per capita gold consumption in the country.

These jewellers fashion ornaments with a layering of 24 carat gold over copper or silver alloys. Their products are lighter and much cheaper than the standard gold jewellery without compromising on the looks.

The one-gram ornaments are gaining popularity at a time when sales volumes of conventional gold jewellers are taking a hit due to the surging price of the yellow metal.

They have been able to cash in on the rising consumer preference for lighter jewellery among the youngsters and the spike in gold rates have not affected these jewellers as much as the conventional ones as the quantity of gold used is much lower.

After a lull in sales during Covid-19 years, they are keen to attain pre-pandemic growth rates of 10 to 20 percent annually.

The per gram rates of gold in the country, both 22 and 24 carat, have gone through the roof in the last one year with the weakening of the rupee, inflation and dollar-rupee exchange rate changes.

The per-gram rates have increased by almost Rs 1,000 in a year and are reaching new peaks. The 22- carat gold, which is used to make traditional gold jewellery, costs over Rs 5,650 per gram now while the 24-carat price is inching towards Rs 6,200 per gram.

“The customers have to pay a higher price for the traditional ornaments as the making charges go up in tandem with the price increase of gold. We have a single rate for ornaments and don’t have making charges,’’ said Preethi Prakash, director of Parakkat Jewels, a prominent player in one-gram jewellery.

The making charge of normal jewellery is around 3 percent but for those involving intricate work like antique pieces or Chettinad collection, it can go up to 20 percent or more.

The cost of one-gram ornaments ranges from below Rs 1,000 up to Rs 10,000 depending on the layering of the gold used and hence is quite affordable to low- and middle-income earners.

The price depends on gold layering which may range from 0.25 gram to 1 gram per piece. Even after the recent spike, the prices have increased by Rs 1,000-2,000 for one-gram ornaments. For traditional jewellery, a customer will have to pay around Rs 1 lakh for an ornament of 2 sovereigns (each sovereign of 8 grams) including the making charge.

“One change we have noticed after the heavy increase in gold prices is that even the middle-income group is coming to buy our ornaments. Earlier, most of our customers were from low-income class,’’ said L Suresh, owner of Aishwarya one gram designer jewellery.

Changing consumer interest is also driving up the business prospects of these jewellers. Many youngsters prefer to wear light weight ornaments. The heavy jewellery pieces usually worn during the marriage are kept in lockers after the function

“Young women like to use light ornament for daily wear. Our jewellery suits them as it is difficult to distinguish it from normal jewellery. Besides, these ornaments can be customised too,’’ said Prakash.

But unlike the traditional gold ornaments, these do not last a lifetime. They can be used for several years if cared well but the customers do not mind much because they cost only a small percentage of the amount used to buy other jewellery. Besides, the one-gram jewellers have attractive schemes for exchange of the ornaments which are beneficial for the customers if done within a short span of about a year.

These days, photo shoots for weddings are a big affair. “For such photo shoots many prefer our ornaments. They don’t have to be fear chain snatchers much as the ornaments cost less,’’ said Suresh.

The increase in gold prices has adversely affected thousands of goldsmiths and allied workers as business in retail outlets has been dull.

“For the gold ornament workers, the wages are a percentage of the gold prices usually. For Kerala designs they get 2.5 to 3 per cent. As the gold prices go up, they get more though the percentage doesn’t change. But the problem is that as the sales in the retail outlets are muted, they get jobs for only a few days a week. The heavier designs are all done outside the state,’’ said A K Sabu, general secretary of Jewellery Manufacturers Association (Kerala)