Increase, fluctuation in gold prices affect jewelry business

Increase, fluctuation in gold prices affect jewelry business
GreaterKashmir.com (press release), India
MUDASIR ALI

Srinagar, Sep 13: Frequent fluctuation and increase in the prices of gold have affected the business of jewelers here.
In a random market survey Greater Kashmir talked to many local jewelers and a cross-section of customers seeking their comments on the frequent price hike in gold prices and its impact on the market.

“Jewellery market is currently witnessing a slump in Kashmir due to frequent up and down trends in the global gold market. Given the frequent fluctuations in its prices, goldsmiths are placing orders for small quantity,” said Muhammad Amin, proprietor SAP Jewelers.

He said: “In just two years a gram of gold (22 carat) has witnessed Rs 300 increase in the price from Rs 500 in 2005 to Rs 800 in 2007. The drastic increase and frequent fluctuation in the price has made most of the customers jittery about purchasing it. Hence, this state of uncertainty about the prices has impacted our trade.”
According to Amin trading of gold on international bourses has made its prices uncertain. “Gold has fallen into big hands after its trading on share markets. Now the prices keep on fluctuating every minute. At 2 pm today the prices were Rs 950 per gram (24 carat), and now (after one hour) it is Rs 946. The changing prices have created a lot of confusion and at times a trader faces awkward position before a customer,” he said.
Many customers echoed views of Amin. “The frequent and steep fluctuation in the prices of the yellow metal has a kind of uncertainty among the them,” they said.
“See, few years ago the prices would go up or down by four to six rupees per gram at one time, but now in a single day there is sometimes an abrupt increase of Rs 20 to Rs 30 per gram. Traders as well as customers get caught up in fix because of this uncertainty in the prices,” they said.
Another jeweler said the changing trends in the gold market have made it very difficult for the small jewelers to be in the business.
“Everyday there are new and latest designs and if you want to be successful in the market, you have to get these designs, but then that demands a huge investment which is not possible for a small jeweler,” he said.
Abdul Rahman proprietor Kohinoor Jewellery HSHS said increase in the gold prices over the months has affected the market to a large extent.
Muhammad Maqbool Zargar proprietor Mughle-Azam, however believes that fluctuation in the gold prices does not have a major impact on most of the jewelers.
“There are traders who are into the gold business for last 20-30 years. They have gained a lot of clientele and for them changes in the marked hardly affect them,” he said.
“The changes usually affect the business of small traders,” Zargar said.