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| Record prices may reduce gold caratage in studded jewellery |
| BS Reporter / Kolkata Nov 12, 2009, 00:32 IST |
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Record gold prices could compel jewellers to reduce the caratage of the metal used for studded jewellery in an effort to keep their offerings within the reach of the average Indian consumer. Though sales have been robust despite gold prices remaining on an upward spiral, jewellers are apprehensive about consumers retaining their hunger for the precious metal in the mid-term. Consequently, lowering purity to make products affordable is being seen as an option.
While, so far, 18 carat is the standard purity of gold used for studded jewellery in India, the appreciation in price of the metal is seeing the introduction of 14 carat gold for these products.
“For every carat that we reduce, the price of the product comes down by 4 per cent. Though jewellers are using 14 carat gold now, we may have to bring down the caratage further to 9 carats if the gold prices near Rs 20,000 for 10 grams,” All India Gems and Jewellery Trade Federation Vice Chairman Bachhraj Bamalwa said. He was speaking on the sidelines of a press conference for the East India Jewellery Show to be held in the city later this month.
With gold prices on Monday hitting a new high of Rs 16,750 for 10 grams, reducing caratage might be a viable alternative for the businesses. Jewellers will have to still contend with traditional Indian consumers who value purity.
Moreover, decreasing caratage will make it difficult for goldsmiths to craft the metal as the introduction of impurities hardens gold.
“Consumers might not take very kindly to the caratage being reduced as gold is one of the few commodities with a substantial resale value. In certain markets such as eastern India, handmade jewellery is more popular and our workers will not be able to work on gold of a lower caratage,” Swarna Shilpa Bachao Committee President Subir Sen said.
However, international markets for Indian jewellery, such as the EU and the United States, have always preferred studded-jewellery, especially those with diamonds, embedded in either 9 or 14 carat gold.
In India, too, the sales of diamond-studded jewellery has been seeing strong growth and the lowering of caratage, which could bring down prices, may well propel domestic demand for such products.
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