In ordinary circumstances, a drop in gold prices comes as news for cheer in a country with a high appetite for the yellow metal, but the scene at jewellery stores in the last few days has ironically left many customers vexed.

At a time when the depreciating rupee coupled with resurgence in international prices pushed the price of the precious metal in the Indian market to at an all-time high, customers who landed up at jewellery stores to sell their gold discovered that the price was substantially lower than that on the commodities exchange.

At a leading private jewellery store in Pune, for instance, pure gold was being sold at Rs 31,500 for 10 gm, while the price on the MCX was quoted at over Rs 34,500 for the same weight. Others were offering it for an even lower price, leading several people, who had meant to sell their jewellery and take home the extra bucks, to fret and fume.

Suresh Hundia, Former President of the Bombay Bullion Association admitted that jewellers across the country were selling gold at Rs 3,000-4,000 cheaper than the MCX price of the metal. The measure was to offset the low numbers of purchasers on account of the high gold prices, and the high volume of ‘scrap’ gold coming in for recycling, he said.

Anuj Gupta, AVP, Technical Research, Commodities, Angel Broking, said that the spot market (the price in the shop) is usually slower to react to volatility, and is currently trading below the prices in the futures market. “There is a tendency for customers to sell gold when the prices are high, and jewellers are reluctant to take delivery as their profitability would be hit,” he said.

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