High prices make gold sales dip in Kerala

By Jeevan Mathew Kurian, IANS

Kozhikode : The surge in gold prices is impacting the sales of Kerala jewellers even as the wedding season is around for the state’s Christians.

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When the price breached the psychological mark of Rs.1,000 per gram last week, jewellery sales slumped by as much as 40 percent.

“Our sales witnessed a sharp fall in the beginning days of the New Year. The sales dipped about 40 percent when the price crossed Rs.1,000 per gram Jan 3,” said B. Girirajan, managing partner of Bhima Jewellers.

“This is a short-term phenomenon. The sales will rebound within two weeks as people will return to the market to make purchases,” Girirajan told IANS.

But M.P. Ahmed, the chairman of Malabar Gold, another prominent jeweller in Kerala, has another take on the issue.

“There is a slump in sales and we have a 20 to 25 percent dip. The gold price has been on an upward trend and fall in sales was gradual and concurrent. There will be short term volatility, but in the long term the prices are likely to go up,” said Ahmed.

After Christmas, it’s a season of marriages among Christians. Therefore, sales pick up during this time wherever there is a sizeable Christian presence. Christians constitute around 20 percent of Kerala’s population.

“Here in northern Kerala, the sale is maximum during April-May. Onam and Christmas come second with regard to sales,” Ahmed said.

“Surely, it is not possible to postpone the purchase of gold for marriages. They have to buy it, but in lesser quantity. When the prices go up, it is only those who make occasional purchases of gold who are likely to reschedule their shopping plan,” he pointed out.

There has also been a rush to sell gold to take advantage of the price rise.

Jewellers here provide customers a facility to protect themselves against the vagaries of the market. A customer can pay for a future purchase at today’s rate to his advantage. If, however, the price falls, the customer is allowed to make a purchase at the lower rate.

“After the gold price crossed Rs.1,000 per gram, there is a noticeable increase in those seeking to make use of this advance-booking facility. People are disposing of gold to take advantage of the price rise,” said Girirajan.

“The price rise has not discouraged customers here. Only, they are compelled to be satisfied with a lesser amount of gold,” said P.J. Kurian, sales manager of Josco jewelry at Kottayam, a Christian-dominant region around 200 km north of Thiruvananthapuram.

“The number of advance bookings is going up here. After the price rise, the bookings have gone up by at least 20 percent,” said Kurian.