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When Sneha Deshpande, a random gold jewellery buyer, visited the Tribhovandas Bhimji Zaveri showroom at the jewellery hub of Zaveri Bazaar on Wednesday, she found little room to enter. "It was unusual," she said, wondering, "How can all jewellery lovers visit the showroom at one go?"
Ditto was the case with other small as well as big jewellery retailers, not only in Zaveri Bazaar but also elsewhere, as gold prices declined sharply in just a few days after 12 years of sustained upside.
Consumers in Delhi also thronged leading jewellers to buy gold jewellery. In Ahmedabad, some jewellers even turned down customers as they ran out of stock. The jewellers were also worried that stocking gold would land them in losses, should prices keep falling.
After giving double-digit annual returns for more than a decade until 2012, the yellow metal suddenly started crashing over the past few days. The declining trend has continued with standard gold in Zaveri Bazaar dropping 12 per cent in the past seven days to trade currently at Rs 25,680 for 10g. The price declined intra-day, which jewellers such as Jugaraj and Tejraj, and TBZ comfortably passed on to consumers.
"On a days like this, we have to forget our lunch as customers do not want to wait," said a TBZ official.
Jitendra Jain, partner of Jugraj Kantilal & Co, a Mumbai-based jewellery retailer, said sales have been very robust with both types of customers coming to the shop now. A section of the customers are ready for replacement of old with new ornaments due to lower making charges (making charges are 10-15 per cent of the gold price, hence, the decline in gold price would proportionately lower making charges). Also, new buyers have booked huge quantity of bullion and jewellery.
Reshma Dubey, a working woman with a public sector firm, bought 50g gold coins amid expectations of a price rise from the current low levels. "By buying at the current lower prices, we are now protected against the possible price rise to a certain extent for our daughter's wedding next year," she said. Jewellers have been advising customers that this is the time to buy, should they need gold in the near future.
These jewellers have witnessed around 25 per cent increase in sales in the past three days alone.
Jewellers such as Tanishq and Gitanjali Gems, too, have recorded brisk sales with both regular and opportunistic customers rushing to book gold jewellery for future use.
"Although it would be premature to put a number to sales growth as compilation of national data is done with a lag effect, we can say sales remained robust," said Sandeep Kulhalli, vice-president (retail and marketing), Tanishq.
Dealing in both diamond and gold jewellery, Gitanjali Gems has also witnessed 15-20 per cent growth in sales in the past three to four days.
Mehul Choksi, managing director of Gitanjali, said the fall in gold prices would attract customers towards diamond jewellery as prices of precious stones remain stagnant.
