High prices lead to 25% rise in used gold sales

Record high gold prices have prompted Indian investors to cash in on their holdings, leading to a 25 per cent rise in the sales of used gold (scrap recovery) in the last one month. The metal sustained above the key psychological level of Rs 14,000 per 10 gm for three weeks and set four new records in 10 days.

The yellow metal zoomed past all previous record on Wednesday with spot price for standard gold hitting an all time high of Rs 15,700 per 10 gm. In Zaveri Bazar, Mumbai’s famous precious metals market, the metal hit a new high of Rs 15,500 per 10 gm in early Wednesday trade, a rise of 1.77 per cent from the previous day’s close at Rs 15,230 per 10 gm.

Investors start used gold sales typically when the metal breaches the key barrier and performs above their expectations. This time, too, gold has broken all key barriers on global economic downturn, thereby, luring investors to sell their holdings, said Suresh Hundia, president, the Bombay Bullion Association. According to Ashok Minawala, chairman, All India Gems & Jewellery Trade Federation, scrap gold sales have risen 20-25 per cent from the average daily recovery of 500 kg.