MUMBAI: The official price of gold climbed merely about one per cent on Thursday, but markets were abuzz with reports that the rates touched as high as Rs 65,000 per 10 gram with jewellers reportedly accepting demonetized big currency notes. There were also reports of IT raids being conducted on some jewellers.
"Jewellery shops in Ghatkopar (a suburb of Mumbai) did not close on Tuesday night. Small businessmen and traders who get cash every day as part of their business made a beeline to the shops and purchased a huge amount of gold, paying for it in Rs 1000 and Rs 500 notes," a businessman told the New Indian Express.
"Jewellers can show back-dated entries up to a week. Soe such transactions are expected to go on for around a week," he said, speaking on the condition of requesting anonymity.
"As soon as (Prime Minister Narendra) Modi made the announcement, the rates of gold were hiked by Rs 4000 per 10 gm. But as time passed and people started coming to shops with huge wads of demonetized currency notes, the rates rose to around Rs 45000 for 10 gm. The next day it spiked further. Today it touched a high of around Rs 65000," he said.
There were unconfirmed reports that people even purchased gold for Rs 70000. But once news of IT raids spread, such transactions began to checken out.
"Transactions like this must have happened elsewhere too," said a gold valuer at a multi-state cooperative bank in Mumbai.
IT officials confirmed they carried out some raids on jewellers, but declined to divulge details. "Raids were conducted on a few jewellers today to check malpractices after the demonetization of big currency. We request all jewellers to support the step taken by the Prime Minister," a statement released by the India Bullion and Jewellers Association (IBJA) said.
Unconfirmed reports said at least six traders in Zaveri Bazar in Mumbai were raided by IT officials.
Meanwhile, market reports from across Maharashtra said business was sluggish on Thursday due to of nonavailability of cash.