Gold trade witnessing a mixed trend in Unlock 2.0

Kolkata: Gold trade in the country is witnessing a mixed trend in Unlock 2.0.

While there are green shoots of a recovery, the supply side is under stress. Jewellers said jewellery manufacturers were asking for payment for the products they had supplied during the pre-Covid period but were yet to be sold. This has created a financial stress to the retailers, who have just started to witness footfalls at their showrooms, they said.

“The manufacturers want the money for the goods they had sold before the lockdown started,” India Bullion & Jewellers Association national secretary Surendra Mehta said. “They are asking the retail jewellers to pay them or return the goods so that they can sell off these jewellery and recover money to pay back the bullion banks from whom they have bought the gold.”

Mehta said there were early signs of a recovery in the market. “Manufacturers of jewellery in Mumbai’s Zaveri Bazaar are getting orders for supply of jewellery from all over the country, which indicates that slowly the demand is returning,” he said.

Kolkata-based jeweller Senco Gold & Diamond said there was an increase in customer footfalls at stores. “People with immediate requirements like weddings or any other important occasions at home and those who booked jewelleries online are visiting stores,” executive director Suvankar Sen said. “Our firm has adopted a two-pronged strategy to invest in both offline and online infrastructure which will also help create new job opportunities.”

A similar trend is being witnessed by other jewellers too.

Malabar Gold & Diamonds chairman Ahammed MP said: “Our stores located in the NCR region and states like Haryana, Punjab and Uttar Pradesh in the North and Telangana, Andhra Pradesh and Karnataka in the South are receiving encouraging responses in terms of footfalls, customer queries, order deliveries as these regions have witnessed significant progress in the unlocking phase. The stores in the southern region in particular are witnessing healthy customer footfalls to buy gold, driven by the anticipation of a further rise in gold price.”

Gold prices traded higher on Thursday with international spot gold extending gains to $1,814 a troy ounce, the highest since 2011. In India, gold futures on the MCX for August delivery gained Rs139 to Rs 49,298 per 10 gm.

Gold prices rose on heightened risk sentiments amid increasing Covid-19 cases. According to Johns Hopkins University data, the number of global cases topped 12 million on July 9.