AHMEDABAD/KOLKATA: Jewellers are feeling the heat of weakening rupee. The import bill for gold and silver is on the rise. The prices of diamond, gold and silver jewellery could rise if the rupee falls further.
Bachhraj Bamalwa, chairman of All India Gems & Jewellery Trade Federation, said: "The situation has worsened due to a weak rupee. Internationally price of gold as of today is down by $178 per ounce from its peak level of $1,920 per ounce that it had clocked in September. Unfortunately, prices of gold in India are shooting up due to a weak rupee. Price of gold in India is hovering around Rs 29,500 per 10 gm. This has impacted the demand of gold in the country despite this being the wedding season. The demand for gold jewellery is down by 10% to 15% in volume terms."
Bamalwa further added that the investment demand for silver has died down. "Silver price has jacked up to Rs 57,500 per kg, which is dampening the mood among investors. It is a matter of worry if this trend continues for long," he added.
According to the WGC's Gold Demand Trends report for Q3 2011, the jewellery demand in India was sluggish during the seasonally slow months of July and August, compounded by high inflation and greater volatility in the local gold price. Buying recovered slightly with the onset of the festive and wedding season.
"Overall, Indian jewellery demand in Q3 saw a 26% decline in tonnage, when compared to the same quarter in 2010, to 125.3 tonne. However, yearly demand to the end of September is very close to the record levels seen in 2010," said the report.
Vijay Jain, CEO of Orra, said: "There has been a sharp jump in gold and diamond prices over the last two quarters, which has to some extent affected the demand. However, the customers are getting accustomed to these rising prices. At Orra, we are yet to see a slowdown in demand."
Source : economictimes.indiatimes.com