Gold prices in India have jumped by ₹874 per 10 gm to touch ₹ 57,415/10 gm after the Palestinian group Hamas launched an attack on Israel on Saturday. Industry executives said prices could increase further by ₹2,500-3,000 per 10 gm if the conflict in West Asia deepens.
“The old gold exchange will increase by up to 15% this festive season compared to last year as gold price has started moving northward,” Suvankar Sen, MD & CEO of Senco Gold & Diamonds, told ET. According to Sen, exchange of old gold accounts for 25-30% of the company’s business in its urban area stores, while in its rural stores it is 30-35%.
“Since gold price is on the higher side, and Hallmark Unique Identification (HUID) number has become compulsory, people are preferring to exchange their old gold jewellery. Also, rural markets have seen less liquidity for us, so old gold exchange is higher,” said Sen.
Tanishq’s gold exchange business accounts for 41% of its total business, said Ajoy Chawal, its CEO. “We are aiming at 45% of our business to come from gold exchange in the current financial year. This will also help to reduce the import of gold.”
Malabar Gold & Diamonds said that due to elevated gold prices and evolving design preferences, people are opting for its old gold exchange programme. “In fact, our gold exchange programme contributed 36% of the total sales in FY23. In FY24, the trend of unlocking value through the gold exchange programme continues and we expect the same percentage of contribution this year too,” said MP Ahammed, chairman of Malabar Group.Gold prices are almost always affected by global inflationary trends and geo-political developments. Jateen Trivedi, VP research analyst at LKP Securities said the geopolitical tension in West Asia will add pressure on risky assets such as equities globally, and thus the outflow from equities will be seen getting allocated to gold.Impact on diamond trade
Meanwhile, the chairman of Gem & Jewellery Export Promotion Council said it is too early to assess the impact of the conflict on India’s diamond trade.
“It is too early to definitively assess the impact and we are keeping a strict watch on the situation,” said Vipul Shah.