VELLORE: People have traditionally turned to gold to store their wealth in times of crisis.
Ramesh Kumar, president of the Vellore district Jewelers and Pawn Brokers Association says that when price of gold declines, people wait for an opportune moment to purchase the shiny metal to reap profits when the price rises again.
According to him regular customers are putting off the purchase of gold despite prices having plummeted as compared to the past two years, because they expect the prices to fall down further.
Customers who prefer large scale purchases of gold, are also waiting for a further slump putting themselves on ‘wait mode’, he added.
Ramesh Kumar, however, advised the lower middle class that this is the right time to purchase gold as there may not be a further fall in prices.
“I expect there could be a minor fall by another Rs 25 per gram but not more in the next one week or so after which the price would increase when demand picks up,” he noted.
Referring to the fall in prices in the international market, he said that a number of factors have influenced the price-fall in India including the fact that China, the biggest consumer, dumped gold in the international market.
Farmers in rural areas continue to keep their fingers crossed as their purchasing power depends on the monsoon and crop-yields.
Since Vellore district has had fluctuating levels of rainfall, farming activity has not been resurgent in the past two years which has only worsened the purchasing capacity of the farming community.
If farmers had been blessed with good rains in the past two years, the farmers would have taken advantage of the fall in gold prices to their maximum benefit.
Even the sale of gold in Shroff Bazar in the Fort City has only witnessed a marginal increase in sales by 10 to 15 per cent in the last couple of days, according to Ramesh Kumar.
He added that the sale of gold was marginally more in big show rooms in the city. On an average, Vellore sells around 10 to 25 kg of gold a day.
Another trader Balvanth Jagadle was of the opinion that falling prices of gold has made people lose faith in the yellow metal.
They have lost interest and fear that they cannot get a good price when they sell it. Along with gold, the price of silver has also fallen which is an additional disadvantage for them. If the prices of gold and silver continue to fall, pawn brokers will be seriously affected, according to the Vellore Jewellers and Pawn Brokers Association President.