Buyers keep hands off gold, as sales plunge 60% in June, steepest drop since Covid

Kolkata: Gold sales in June dropped 60% from a year earlier to 35 tonnes, the steepest post-Covid fall in volume, as high and volatile prices kept buyers away, the India Bullion & Jewellers Association (IBJA) said.

In July too, gold price is showing volatility and there has been no drop in prices till date. On Monday, the price went up by ₹600 per 10 gm to cross the ₹98,000 mark. At the retail level, consumers will have to shell out ₹1,00,997 per 10 gm, including GST of 3%.

“We do not see any immediate recovery in demand with many gold jewellery manufacturing units across the country cutting down their production of gold jewellery by almost half,” IBJA national secretary Surendra Mehta told ET. “Small players are affected. It is a tough time for the gold trade. Despite offering freebies and discounts, volume demand is not going up.”

Gold trade analysts said internationally gold prices continued their upward trend, approaching $3,400 per ounce following renewed trade tensions sparked by US President Donald Trump‘s threat of additional tariffs on the European Union and Mexico. While Trump has allowed room for negotiations until August 1, the potential for a rapid escalation has kept risk assets under pressure, prompting investors to seek safety in haven assets like gold.

Jewellers are actively pushing 14-karat gold jewellery to keep their business growing in the midst of the price surge. Because of the lower price points compared with 22-karat gold traditionally used for making jewellery, 14 karat is becoming a more practical option for jewellery buyers.

“Fourteen-karat gold is gaining traction in India, particularly among the younger demographic, due to its durability and affordability,” said Rajesh Rokde, chairman of the All India Gem & Jewellery Domestic Council. “I believe this trend will continue to grow, driven by the increasing demand for lightweight jewellery pieces that offer elegance without breaking the bank.”IBJA’s Mehta said the association had held several rounds of talks with the Bureau of Indian Standards (BIS) to allow a hallmarking facility for 9-karat gold. “We have been informed by the BIS that they have worked out the hallmarking model for 9-karat jewellery. We are expecting clearance from the Ministry of Consumer Affairs, Food and Public Distribution shortly for hallmarking.”Currently, hallmarking is available on 24-, 22-, 18- and 14-karat gold jewellery.