Jewellers down shutters till new stocks, notes arrive
MUMBAI: The move by the government to discontinue `500 and ` 1000 currency notes late Tuesday led to a rush for converting parts of large currency hoards, into gold, and also fueling an abrupt hike in unofficial premium over and above the gold price.
Jewellers did brisk business soon after the Prime Minister’s speech with some gold outlets keeping open well past midnight as people rushed to use their `1,000 and `500 currency notes to buy gold stocks lying unsold since Diwali, before the currency ceased to be a legal tender post midnight.
The rates at which these transactions were conducted were in the range of about `9,000-10,000 per tola.
So if the official gold price was `31,750 for 10 grammes, jewellers were selling them at over `41,000. The high price did not deter the buyers, who wanted to get rid of the `500 and `1000 currencies.
“It was also beneficial for the jewelers who could show the sales in their books as Diwali sales,” said one jeweler in Kandivali, a suburb of Mumbai.
However, by Wednesday morning, the trend reversed with jewellers refusing to accept the scrapped currency with gold stocks having depleted.
“We felt heavy rush after the news was broken last night in a few showrooms in Mumbai. We also started selling gold in emergency cases like wedding against cheque” said MP Ahammed, chairman, Malabar Gold and Diamonds. He still expects some impact on sales in the short-term.