Pune, Aug. 16 The onset of the Indian festival season and the downward slide in the price of the yellow metal has set off a gold rush that’s quite unprecedented in recent times, leading to what is seen as an “acute shortage of raw gold” across the country.
On account of the sudden spurt in demand, banks dealing in the commodity, are facing a huge crunch, and according to one jeweller, “have run of out stocks”. Consequently, the metal is selling at a premium, as banks as well as dealers have upped their premiums, and are supplying the precious metal only against bookings.
In a cascading effect, jewellers too are making deliveries four to five days after they take orders and payment in advance. Mumbai sales
In Mumbai, one of the largest bullion markets in the country, daily gold sales have gone up almost eight times from an average of 500 kg to 4,000 kg over the last few days, Mr Suresh Hundia, President, Bombay Bullion Association Ltd, told Business Line.
“Some banks are charging suppliers’ commission of Rs 4,000 per kg of gold, against the normal Rs 500. Dealers’ premiums too have increased sharply, from Rs 2,000 to Rs 30,000 a kg,” he said, adding, t in the coming days, prices may drop further.
Mr Fatehchand Ranka, President, Maharashtra Saraf Mahamandal, an umbrella organisation for 434 jewellers’ associations with a total membership of over one lakh jewellers, confirmed that the tremendous resurgence of interest in buying gold had created a shortage.
“There is currently a tremendous demand for gold. It has been rising for the last 10 days, but has peaked over the last two days. The number of buyers is around thrice as many during normal times and almost every shop is looking like a fish market,” the owner of Ranka Jewellers, one of the city’s largest jewellery store chains, said. He added, “Banks have run out of gold, and are importing more of the commodity. To cope with the situation, we are taking bookings, and giving delivery after four or five days.” Psychological barrier
According to Mr Saurabh Gadgil, partner in PNG Gems and Jewellery, the psychological barrier for gold purchase is around Rs 11,500 per 10 grams. “Once this has been breached, the demand has spiralled up,” he said, adding that consumers are now buying gold in both biscuit form for investment as well as jewellery. “The approximate percentage is 40:60 respectively,” he said.
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