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With customers largely staying indoors amid the coronavirus outbreak, and demand plunging with soaring prices, most of the large organised jewellers in the country are planning to down shutters.
Also, most State governments have directed large retail outlets to close down, besides placing curbs on public gatherings.
Surendra Mehta, National Secretary, Indian Bullion and Jewellers Association, told BusinessLine the demand for gold jewellery has tumbled due to economic uncertainty after the Covid-19 outbreak and some of the jewellers are planning to down shutters in the interest of their employees’ safety.
Also, gold prices are spiking due to the rupee depreciation. If the current trend of uncertainty continues it can even touch ₹49,000 per 10 g over a year, he added.
Unanimous decision
Sauarbh Gadgil, Managing Director, PNG Jewellers, said all the jewellers in Pune have unanimously decided to close down business till the fear over Covid-19 subsides. With a significant fall in retail walk-ins for jewellery purchases in Maharashtra, sales during Gudi Padwa , the Maharashtrian new year, are unlikely to improve, he added.
After the recent rally, though gold prices in global and online futures markets in India have fallen over the past few days, they are still hovering close to ₹40,000/10 g levels.
Global trends
Tanya Rastogi, Director, Lala Jugal Kishore Jewellers, said equity markets across the world are crashing and to make up for the margin calls gold positions in commodity markets are being liquidated by a few investors. Hence, despite a 100 bps US Federal rate cut and substantial quantitative easing planned, gold prices have plummeted. The last time this happened was during the 2008 financial crisis, she observed.
Back home, gem and jewellery demand is driven by weddings, which have been postponed. Virus fears have also brought wedding shopping to a halt, she added.
Moreover, the sudden fall in global prices has hit investor sentiment. They are wary of buying in a dip as their trust in gold as a safe haven is tested, said Rastogi.
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