Gold price surge marks prudent purchase this Akshaya Tritiya

COIMBATORE: With gold prices skyrocketing like never before, goldsmiths in Coimbatore are experiencing stress due to the dip in sales.

The surge in gold prices is attributed to various global factors, including the looming trade war between the United States and China and investors eyeing the yellow metal, resulting in a drastic decline in gold sales. The downward trend kick-started with the beginning of the Russia-Ukraine war and the situation has only gone from bad to worse, day by day.

Jewellers note, “Gold prices are expected to increase by over Rs one lakh a sovereign in the next few months. With Akshaya Tritiya approaching in barely a few days, it is important to note that the sale of gold has slumped to a meagre 20 per cent over the last three months.”

In January, the price of 22-carat gold was above Rs 7,000 a gram, and on Sunday it was Rs 9,005, an increase of over Rs 14,000 per sovereign. It is to be noted that in the last year from April 2024 to the corresponding period, the price of gold has surged by a whopping Rs 23,000.

The surge in gold prices affects more than one lakh workers who are directly and indirectly dependent on the jewellery sector, hampering their livelihood.

In total, there are at least 45,000 skilled workers. Of these 60 per cent are from West Bengal and others are from Tamil Nadu, depending on the jewellery industry for their livelihood. The decline in the jewellery sector began with the Covid-19 pandemic, economic recession and wars, in turn shrinking the number of labourers in the industry from around one lakh over the decade.

“Even in our factory, many workers have become jobless. If this situation persists, the skilled labourers may leave for their hometowns putting the industry’s survival at stake,” highlighted B Muthuvenkatram, president of Coimbatore Gold Jewellery Manufacturers Association.

Coimbatore, a home for over 600 gold-making units, has earned the tag of the third largest manufacturer of gold jewellery in the country. However, in the wake of a spurt in prices of the yellow metal, uncertainty looms over the revival of the sector.

It is estimated that these goldsmith units in Coimbatore churn out over 100 tonnes of gold jewels to be sent to different parts of the country. While Kolkata, Mumbai and Ahmedabad are considered the major manufacturers of gold jewellery, the jewellery made in Coimbatore are mostly handmade and are preferred for their unique style and durability.

Despite Akshaya Tritiya falling on April 30 (Wednesday), the slowdown in sales suggests that people are wary of buying gold jewellery due to unaffordable prices and are postponing their plans in the hope of a price dip.

“It doesn’t look like the month of Akshaya Tritiya when the goldsmiths usually function day and night to meet the orders placed across the nation. In the current situation, the workers don’t get consistent work and are struggling to cope with the grim situation,” said B Sabarinath, president of Tamil Nadu Jewellers Federation.

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Though the government cannot do much about controlling gold prices, the jewellers pin their hope on the reduction of the import duty from the existing six per cent to three per cent. This may boost the sale of gold, they pointed out.