With gold price testing new highs, jewelry recycling is all set to hit 100-150 tonnes this month against 80 tonnes logged last month.
Gold prices have jumped ₹1,863 per 10 gram to close at ₹62,415 on Friday against ₹60,579 on November 7. It had hit a new high of ₹63,281 last Monday amid intense volatility on back of firm trend in the global markets on the expectations of US Fed cutting lending rates sooner than expected.
The soaring gold prices have depressed jewellery demand, though exchange of old jewellery for new jewellery and cash has picked up sharply at Zaveri Bazar in Mumbai, one of the oldest jewellery market and a major hub for B2B and B2C jewellery industry.
Kumar Jain, Spokesperson, India Bullion and Jewellers Association said that there has been a big rush in almost all the jewellery shops at Zaveri Bazar in the last two months as consumers are taking advantage of high gold price and exchanging it for new designs by adding little more money from their savings.
Most of the consumers are buying jewellery for forthcoming weddings in the family or gift it to their close friends and relative in a wedding, he added.
Jewellery demand increased seven per cent in the September quarter to 156 tonnes against 146 tonnes in the same period last year.
Gold prices on LBMA had rallied from $1,928 an ounce in the September quarter to $2,230 an ounce currently and has triggered a rally in gold prices globally.
According to the Confederation of All India Traders’ estimates, about 3.5 million weddings are to be solemnised till December-end and generate an estimated business of ₹4.25 lakh crore ($51 billion) this wedding season. In comparison, about 3.2 million weddings took place in the same period last year and expenses were estimated at ₹3.75 lakh crore.
Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers, said gold price surge has led to a trend of consumers adjusting their purchases by exchanging old jewellery for new, especially during weddings, and Kalyan Jewellers offers a 100 per cent exchange on old gold.
Heavyweight studded and traditional bridal jewellery will remain hot favourites this wedding season and the revenue is expected to grow over 35 per cent in the first half of December quarter, he said.
“We are expecting the demand to surge till February despite temporary pauses in discretionary spending during phases of gold price volatility,” he added.