KADAPA: Gold, once a cherished adornment for the common man, has transformed into a premium commodity, with 10 grams of 24-carat gold now priced close to Rs 1,00,000.
This unprecedented surge, driven by global factors such as the ongoing Russia-Ukraine war, Israel-Lebanon tensions, a weakening US dollar, and political instability in Arab nations, has rendered gold jewellery unaffordable for many.
In Proddatur, YSR Kadapa district, renowned as the “Second Mumbai” and “City of Gold” for its thriving gold market, the soaring prices have crippled businesses and pushed traditional goldsmiths into financial distress.
The escalating cost of gold has shifted consumer behaviour, with middle- and upper-class buyers opting for gold biscuits as investments rather than ornate jewellery.
This shift has led to a 20% decline in sales, severely impacting Proddatur’s 350 jewellery showrooms and manufacturing units, which provide livelihoods for nearly 4,000 goldsmiths.
Across the erstwhile Kadapa district, approximately 1,300 gold outlets employ over 8,000 artisans, many of whom now face unemployment due to dwindling orders. Goldsmiths, equipped with costly machinery and specialized skills, struggle to pay shop rents, electricity bills, and staff salaries.
Many of the local artisans are forced to seek alternative employment, though transitioning to other fields proves challenging.
Proddatur’s gold market, with a rich heritage spanning over a century, gained national prominence when local traders made significant purchases during an auction conducted by RBI, establishing a reputation for reliable pricing and pure gold.
Government urged to set up Gold Corp to aid goldsmiths
However, the past decade has seen local artisans sidelined by multinational corporations importing jewellery from Northern India.
These multinational corporations, backed by aggressive promotions, attractive discounts, and substantial investments, have marginalised traditional craftsmen, exacerbating their plight.
Gold prices have been volatile, surging from Rs 77,500 per tola (10 grams) on October 3, 2023, to Rs 1,02,000 last week, before settling at Rs 97,500.
Traders predict prices will fluctuate between Rs 93,000 and Rs 1,20,000, with little hope of significant declines.
Proddutur Jewellery Merchants’ Association President Kopparthi Madhu highlighted the drastic reduction in sales, noting that purchases are now largely limited to wedding necessities like bangles, chains, and necklaces.
The combination of global war fears, falling agricultural incomes, and reduced liquidity among farmers and citizens has further dampened demand.
Goldsmiths’ Association President Elias emphasized the dire circumstances faced by artisans, urging the state government to establish the proposed Gold Corporation and allocate funds to revive the traditional gold-making sector.
Without urgent intervention, thousands of skilled goldsmiths risk losing their livelihoods. The crisis threatens to erode Proddatur’s storied legacy as a gold trading hub, with traders and craftsmen appealing for immediate measures to support the industry and preserve the region’s cultural and economic heritage.