The small shop of Tanaji Industries in Zaveri Bazaar is packed to the gills even as customers bargain vigorously for that extra buck for the gold they have tendered for sale.

Ashok Gulati, Proprietor of Tanaji Enterprises, has no time for argument as he is all glued to the TV for the latest update on LME gold prices.

“Gold has been very volatile through the day. It started at $2,055 (an ounce), fell to $2,009 and bounced back to $2,018. We bought back old jewellery at ₹52,300 per 10 grams last week and now purchasing it at ₹49,000,” he said.

Gold prices hit a record high of $2,074 an ounce on March 9 before easing to below $2,000. On Thursday, it was quoted at $2,002.74 at 1900 hours IST.

Gold as safe haven

Over the last couple of weeks, gold has surged from levels of $1,900 after the Russian troops entered Ukraine. Gold prices usually gain during geopolitical crisis as it is seen as a safe asset.

According to Kumar Jain, National Spokesperson, Indian Bullion and Jewellers Association, gold has proved its safe haven status and no asset including real estate or share market can give cash in exchange when there is an urgent need despite all the upheavals.

Rising gold imports

With the Indian rupee dropping nearly 5 per cent against the dollar to 78 before recovering to 76.30 on Thursday. This also resulted in gold prices gaining since any drop in the Indian currency leads to imports turning costly.

India gold imports more than doubled in 2021 to 924.6 tonnes as the yellow metal’s price ruled flat for a major part.

This resulted in gold scrap supply dipping by 21 per cent last year to 75 tonnes against 96 tonnes in 2020, according to World Gold Council data.

Dealers in Zaveri Bazaar are known for giving higher value for old gold jewellery as they command better margin by recycling it in their own factory.

Zaveri Bazaar not only buybacks old jewellery but also records new jewellery sales of ₹200 crore a day and collects 600-700 kg of gold when prices spike suddenly.

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