CHENNAI: It sold like hotcakes on the day Union Government demonetised Rs 500 and Rs 1,000 notes. But gold sales have come down drastically since Wednesday. The gold markets witnessed a near 90 per cent dip in sales since Wednesday afternoon as the price of a sovereign rose to Rs 1,500. Though the rates of a sovereign came down by Rs 400 on Thursday, sales of gold did not pick up, as the rates were still higher when compared to the rate that prevailed on Tuesday before the news of demonetisation of the higher denomination currency broke.
With various factors having contributed to the rise in price of gold – Prime Minister Narendra Modi’s announcement and Donald Trump’s victory in the US presidential elections – jewellery shops are suddenly going through a dry spell with bare minimum sales. According to L.K.S. Syed Ahmed, chief adviser of the Tamil Nadu Jeweller’s Federation, the price of gold has come down by Rs 600 a sovereign on Thursday after gold prices on Wednesday hit a 3-year high of Rs 31,750 per 10 grams, but still the market has not picked up.
“The market is very dull. The shops are not accepting Rs 500 and Rs 1,000 rupee notes, and are open to accepting debit and credit cards and cheques,” he said. ‘This sudden change has affected the market drastically. We have to patiently wait for things to settle down,” he added. With shop owners not expecting increase in sales until December end, it is feared that Christmas and New Year would be severely hit.
“We are not getting our regular customers. Many came day before yesterday (Tuesday) and bought a lot of gold, while others came and booked it. However, today the footfall in our shop was alarmingly low,” said a salesman at a gold shop in T. Nagar. “The market is terribly affected with the normal business not crossing 10 to 15 per cent. “The US elections have affected the International gold price,” said Jayanyhilal Challani, President, Madras Jewellers and Diamond Merchants’ Association.
