Old gold sales grop 60% in past 10 days

Kolkata: Old gold sales have dropped by almost 60% in the last 10 days as sellers are waiting for a fresh hike in price of the yellow metal during the upcoming festive season. Till the third week of August, bullion traders in Zaveri Bazar were receiving 50-60 kg of gold per day which has now dropped to 20 kg a day. Gold supply from recycling of old jewellery in India had doubled in April-June quarter to claim the highest in four quarters following a sharp jump in bullion prices globally. According to World Gold World Council, old gold sales had climbed to 23.8 tonnes for the second quarter of 2016, over 100% jump from 14 tonnes in the previous quarter of January-March.

Though old gold sales have dropped in the last 10 days there has been a 10-15% uptick in demand for silver in rural India in August in comparison to the same month last year on the back of a good monsoon. India imports around 7,000-7,500 tonnes of silver annually. At present, silver fetches a . 46,000 per kg.price of ` Talking to ET, Mukesh Kothari, director, RiddiSiddhi Bullion, said: “The drop in old gold sales is due to two reasons. The primary reason is that there is a general sentiment in the market that prices of gold will go up during Diwali which is compelling sellers to hold back their decision to offload household old gold. Secondly, with the onset of Raksha Bandhan and Janmashtami Indians feel the auspicious time has begun and therefore they should not sell gold which is a symbol of prosperity to them.“

In Tamil Nadu and Kerala, which consumes good volumes of gold, a lot of people were liquidating a portion of gold for money and recycling them to make new jewellery. “In the last one week since gold prices dropped 4 -5%, the old gold sales have come down,“ said James Jose, secretary of Association of Gold Refineries and Mints. Drop in old gold sales in the market has also resulted in discounts in gold going up.