Pandemic, soaring prices hit gold sales in Kashmir

Representational Photo

The demand for jewelry has dwindled by over 70 percent due to rising inflation and dwindling income caused by COVID19 pandemic.

As per the goldsmiths and dealers, the demand for gold is still decreasing and situation is turning worse. They say apart from affluent families, there is hardly any buyer among the upper middle class and middle class families for gold due its soaring price which has crossed Rs 50,000 per 10 grams for 24 karat and slightly lower for 22 karat.

In Kashmir, gold constituted an important part of a family’s wealth and necessary item used during weddings and festivals. Over the years, investing in gold has also evolved as an ideal hedge for volatile markets primarily due to its steady increase in price.

President, All Kashmir Valley Gold Dealers and Workers Union, Bashir Ahmad Rather while speaking to Greater Kashmir that that gold business in Kashmir is in dire-straits as it has faced onslaught from COVID and soaring prices.

“Demand for gold is down by 70 percent which is a huge setback for the people dealing with the yellow metal,” Rather said, adding that “families are shying away from purchasing gold due to high prices and also COVID has impacted the economy badly.”

“Gold prices per tola (10 grams) has crossed Rs 50,000 for 24-carat, as a result of which gold has become unaffordable for many. Also many people are waiting for prices to come down which seems unlikely given the global situation,” he said adding that people who have urgency to buy gold this time, buy a very small quantity in comparison to what they might have bought during a normal situation.

Rather added that there is hope that in the coming marriage season the demand for gold will pick up and bring some cheer to the faces of its dealers and artisans.

However consumers are yet to recover from shocking rise of gold in recent months. “In last two years, the price of gold has increased by nearly 100 percent which is a huge expense for families who purchase this metal for marriage ceremonies. It is a huge burden on the families. Three years ago I purchased some gold for my elder son for Rs 6 lakh. Today the same amount of gold for my other son is costing around 11 lakh,” Aftab Ahmad, a local resident.