Old gold sales surge 25% year-on-year as yellow metal breach Rs 60,000 mark – ET Retail

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As gold prices have surpassed the Rs 60,000 per 10 grams mark, old gold sales have surged 25% year-on-year, said jewellers and gold refiners.

“There has been a sharp increase in old gold sales following the spurt in prices of the yellow metal. In South India, some are exchanging old gold for new, while some are taking liquid cash against gold,” said James Jose, former secretary of Association of Gold Refineries and Mints.

In northern India, the trend had started earlier. Generally, February and March are lean months for gold business and people need money for their children’s college admissions. So, they spend less on gold, said Jose.

“There were long queues in Zaveri Bazaar to sell old gold as prices jumped. People are selling gold because the year ending is coming close and they have to invest in tax saving products and also have to pay income taxes,” said Prithviraj Kothari, managing director, Riddhisiddhi Bullion.

On Wednesday, though, people didn’t sell gold because it was Gudi Padwa, said Saiyam Mehra, chairman, All India Gem & Jewellery Domestic Council.

Internationally, gold prices traded flat on Wednesday as investors stayed on the sidelines ahead of the US Federal Reserve’s interest rate decision and policy outlook.

Gudi Padwa Sales
This year, the spring festival of Gudi Padwa coincided with near-record gold prices, which explains why gold sales on Wednesday fell 20% year-on-year, said Mehra.

However, as economic growth influences demand significantly and this gets reflected in gold purchases on such auspicious days, demand is poised to grow in 2023, said industry executives.

Aditya Pethe, director of Mumbai-based WHP Jewellers, said whenever there is a crisis or uncertainty, people tend to move towards gold as a reliable investment.

PR Somasundaram, regional CEO India at World Gold Council, said price pressures could keep rural demand subdued. “Urban buying and digital gold accumulations, which permit flexible low-ticket sizes, could be the emerging stories during this festive season,” he said.

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