Low carat gold mart dazzles

Low carat plain gold jewellery has been gradually attracting traditional consumers because of a dramatic shift in consumer taste and a steep price rise of the yellow metal.

According to an estimate, 18 carat (ct) gold has grabbed approximately 20 per cent market share over the last few years and is still growing as traditional gold consumers have changed their buying purpose from "shelf-life to self-life (daily use)". The remaining 80 per cent plain gold jewellery market mainly uses 22 ct gold as 24 ct purity cannot be used in jewellery-making.

India consumes about 800 tonnes of gold, majority of which goes to jewellery-making. Copper and silver in different proportions are added to gold to provide the required hardenability to gold for jewellery-making.

"Gold consumers' preferences have changed dramatically over the years as most of them now use jewellery items as fashion accessories. Secondly, affordable prices of diamond-studded jewellery have also attracted pure gold jewellery customers," said Preeti B of Tara Jewellery, who uses 18 ct gold for diamond-studded jewellery-making in the domestic market and 14 ct gold for exports.

Price is an important issue for users. Gold prices have almost doubled in the last one-and-a-half years, thus making it unaffordable for middle and lower-middle class. In this case, the preferable choice was to buy lower carat jewellery, said an official of a leading gold jewellery manufacturer.

Overseas, users preferred diamond and, hence, gold with the purity level as low as 9 ct, 11 ct and 14 ct was used for diamond-studded jewellery, said Preeti.

At present, plain gold jewellery has become a fashion accessory and consumers are willing to pay as less as possible. Surprisingly, jewellery with 18 ct gold looks similar to 24 ct at 25 per cent lower prices.

In gold, purity is measured in caratage term, where 24 ct is considered as 100 per cent pure. Eighteen carat gold comprises 75 per cent gold and 25 per cent copper and silver. The main purpose for encouraging the use of low-carat gold is to sustain market competition and maintain hardness, a must for holding diamond in items such as rings, earrings, etc.

"A diamond-studded 14 ct gold jewellery is 15-25 per cent cheaper than that of an 18 ct gold jewellery, and therefore, consumers prefer the former. Also, users can buy a diamond-studded 14 ct gold jewellery for the price of a 22 ct gold jewellery," said Sohail Kothari, director, Fine Jewellery.

He said that over 99 per cent of all diamond-studded jewellery sold in India uses 18 ct gold "" a normal industry standard. Diamond-studded jewellery of 14 ct gold is a very new product offering, which is also gaining momentum.