Higher Prices
As gold prices hit fresh highs, customers queue up to sell old jewellery
This story was originally published at 16:56 IST on 31 January 2025
Register to read our real-time news.Informist, Friday, Jan. 31, 2025
By Sandeep Sinha
MUMBAI – As gold prices hit fresh record highs in the domestic market, sales of jewellery have dried up and customers are parting with their gold ornaments to benefit from higher prices.
Prices of the yellow metal have hit new highs nine times in January alone. On Jan. 31, 24-carat gold prices in Mumbai's bullion market hit a fresh all-time high of INR 82,165 per 10 grams, plus 3% goods and services tax, as subdued US economic data led to safe-haven demand.
"With gold hitting high in spot market, consumers are keeping themselves away from the jewellery market. It seems that consumers have exhausted their gold buying capacity at such record high prices," Surendra Mehta, national secretary of India Bullion and Jewellers Association, said. "In fact, after gold touched 80k, consumers are coming to the market to sell their old gold. The import figure also reflects the same as imports during calendar year 2024 is little less than 2023 imports, despite the reduction in customs duty on gold by 9%."
Total gold imports into the country are likely to have been 720-724 tonnes in 2024, down from 743.86 tonnes in 2023, according to industry estimates.
The price of 22-carat gold was INR 75,263 rupees per 10 grams, and that of 18-carat gold was at INR 61,624 rupees per 10 grams, a new high.
In the December quarter, US GDP grew 2.3%, less than the 2.5% rise expected and below the 3.1% increase in the previous quarter, which led to concerns of slowing economic growth and boosted haven demand, said Renisha Chainani, research head, Augmont Goldtech Pvt. Ltd. "US President Donald Trump reiterated his threats to put a 25% tariff on US goods from Canada and Mexico. Gold has seen safe-haven flows due to repeated tariff threats," she said.
"If gold prices continue to be high, we may see a significant slowdown in jewellery sales. This may also impact wedding demand which accounts for over 60% of jewellery sales in the country," Kumar Jain, owner of Umedmal Tilokchand Zaveri, told Informist.
The upward trend in gold prices is expected to continue in 2025, driven by global macroeconomic factors such as uncertainty on US tariffs, potential rate cuts by the US Federal Reserve, geopolitical uncertainties, and strong buying by central banks, Chainani said. End
US$1 = INR 86.61
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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