Business Standard

Now, gold prices to decide jewellery making charges

Related News

Labour charges to be 15-20% of market value of gold used

With rising gold prices rendering the age-old labour charges of Rs 100 to 250 per gram as peanuts, Rajkot-based jewellers have decided move on to market price-based labour costs. Henceforth, the jewellers have decided to charge labour rates in the range of 15-20 per cent of the prevailing market price of gold used in the jewellery.

Traditionally, a fixed amount for jewellery making labour (in the range of Rs 100 to Rs 250 per gram depending on the type of jewellery) is levied on the customers.

However, this has changed with gold prices moving up substantially. This move is aimed at reducing the losses in profits.

"It has become necessary for us to adopt a new policy with regard to labour charges, as high gold prices marked a dent in our profit," said Bhaya Saholiya, president, Rajkot Gold Dealer Association.

The labour charges in Rajkot have remained unchanged since 1995. But now onwards the association has decided to charge 15 per cent of market value of gold used in the jewellery as labour, while the maximum charge would be 20 per cent. The implementation of this new scheme of labour charges would increase the profit margins for jewellers from 5-6 per cent to 8-10 per cent.

According to Saholiya, jewelers from other parts of the state including Surendranagar and Bhavnagar were charging labour wages as per the market rate. He also added that jewellers down south were also adopting the same measures.

Saholiya said, "Due to high gold prices, the profit margins had come down significantly. We are facing losses in profits for the past two to three years. Moreover everything else is becoming costly and it is hard to maintain the showrooms."

Rajkot is having more than 200 in the city with 7000 small gold shops and more than 25000 labor workers.

According to industry estimates the daily trading volume of gold jewellery in Rajkot would be about Rs 1 to Rs 1.50 crore, while in the peak season like Dhanteras, Diwali and marriage season, it touches Rs 3 to 5 crores per day.

Read more on:   
|
|
|

Read More

Gold prices in correction mode

Main reason for falling prices globally is that equities are turning favourable and many emerging and developed market indices are at multi-year

Quick Links

 

Market News

Steel firms increase prices

This comes amid a rise in transportation costs and high iron ore prices; long-steel producers keep prices unchanged

Sugar mills reiterate need for financial help

Lower realisation than cost of production hits financial performance in April-June quarter, industry seeks govt support

Goa postpones 5th ore auction, anticipating lack of response

State had kept 2.18 mn tonnes of low-grade ore in fifth round after successful sale 5 mn tonnes in earlier rounds

Iron ore seen slumping to $75 a tonne

The commodity used to make steel will average $80 a tonne in 2015, down from an earlier full-year estimate of $85

Markets hit record highs; Sensex ends above 27,000

The Sensex ended above 27,000 for the first time while the Nifty topped 8,100

Back to Top