Editor’s Note
This article examines the impact of record-high gold prices on Kota’s jewelry market, where soaring costs have dampened customer enthusiasm and sales ahead of the wedding and festive season.
Kota: The sharp rise in gold prices has put a brake on the vibrancy of Kota’s jewelry market. On one hand, gold is setting new records, while on the other, customer footfall and buying enthusiasm are declining. Amid preparations for the wedding and festive season, jewelers had hoped for increased sales, but expensive gold has disrupted customers’ budgets. As a result, sales of new ornaments are affected, and people are prioritizing exchanging old jewelry for new designs.
According to major jewelers in Kota, the surge in gold prices over the past few months has directly impacted consumers’ purchasing power. Previously, customers would buy new sets, necklaces, bangles, and other ornaments for weddings, engagements, and family events. Now, most people are melting down or exchanging old jewelry to create new designs. This has reduced the percentage of cash purchases in the market and weakened demand for new ornaments. Currently, jewelry business has declined by 30 to 40 percent.
Typically, advance bookings for the wedding season starting in June-July and year-end begin around this time. But this year, the situation is different. According to traders, while there are inquiries and bookings, the number of those finalizing orders is low. Many families are postponing purchases in hopes of a potential price drop.
If prices remain at this level, retail business could face further pressure. Customers are still coming to the market, but the purchase ratio has decreased. This is impacting small and medium-sized jewelers the most. Traders believe that gold is an important tradition and investment medium for Indian families, so demand will not completely vanish, but sluggishness may persist until prices stabilize.
Jewelry traders say that due to continuous fluctuations in gold prices, customers are unable to make purchase decisions. Many customers visit shops, see designs, but postpone buying after hearing the price. Currently, the price per tola is around 148,800 rupees. Customers who used to buy 50 to 100 grams of ornaments are now reducing weight or deferring purchases. A few years ago, buying 15 to 20 tolas of gold for weddings was common, but now most families limit themselves to 5 to 7 tolas. Due to rising prices, people are preferring lightweight ornaments. Many families are exchanging old jewelry for new designs. Gold prices have become very high, so customers are exchanging old ornaments instead of buying new ones, affecting new ornament sales. After the government imposed import duties, business pace has further slowed.
Meanwhile, in this era of expensive gold, the trend of giving old ornaments a new look has increased rapidly. Housewives and families are getting old necklaces, chains, bangles, and other jewelry redesigned into modern styles. This requires less additional money and provides jewelry in line with new fashion. According to jewelers, there has been a significant increase in exchange and re-making orders compared to last year. The new import duties imposed by the government are also directly impacting business. These days, customer footfall in the city’s major jewelry markets has decreased, and most shops appear deserted. Currently, customers are only coming to shops to get old jewelry redesigned.
The impact of continuously rising gold prices is not limited to the jewelry business but also affects the livelihoods of thousands of artisans involved in jewelry making. With reduced demand for new ornaments, artisans are struggling with a lack of work. This time, due to record gold prices, demand for new ornaments has weakened, directly impacting jewelry manufacturing work. Artisans say that previously they used to get daily work for designing, casting, polishing, and finishing many ornaments, but now work has reduced to less than half.
