Gold prices shoot up; business at an all-time low

The gold market in the month of Sravan usually sees an upswing, as customers tend to shop for the yellow metal in this auspicious month. However this year, gold and silver shops in the bustling markets have seen business dip and wear a deserted look.

The reason is that the prices of gold have risen sharply in the last five months. The last time that gold prices hit an all-time high was in 2011. In April this year, the price of 10 gm of gold was around Rs 32,000, whereas now it is almost Rs 38,000 an increase of Rs 5,000 is a serious concern for gold lovers, who are mostly middle-class women.

The first hit to the gold business came when the Government of India decided to raise the import duty in this year’s July Budget from 10 per cent to 12.5 per cent. Import duty increases the landed cost of gold in India as most of the gold is imported. What worsened conditions further was the commercial war between America and China.

It must be recalled that for the last four years the prices of gold were stable, thanks to a steady global market. To discourage investors from buying gold, the government had initiated a gold bonds scheme. With all these measures in place the prices of gold remained steady.

Customers are now choosing to wait and watch before they take to buying the yellow metal.