Editor’s Note
The bullion trade is undergoing a significant transformation. As this article explains, historic price volatility and shifting consumer preferences are moving the focus from traditional jewelry to gold and silver bars and coins as the primary assets for trade and investment.
The historic volatility in gold and silver prices over recent years has fundamentally altered the state and direction of the bullion trade. A business once identified with traditional jewelry, heavy ornaments, and family purchases is now rapidly becoming centered on bullion (gold and silver bars). Heavy price fluctuations, changing consumer mindsets, and business risks have made gold and silver bars and coins, rather than jewelry, the focal point of trade.
Due to factors such as war, inflation, interest rates, and the dollar’s movement in the international market, and import duties, taxes, and the rupee’s situation domestically, gold and silver have seen both record highs and sudden major declines. This sharp volatility has increased instability in the bullion market, directly impacting jewelry sales. The weight of ornaments used in auspicious occasions is decreasing. The exchange of old jewelry has increased. The purchase of new jewelry has become limited. As soon as prices fall, customers are prioritizing investment in bullion.
Traditional jewelers are no longer just jewelers but have also taken on the roles of traders and investment advisors. Customers are being advised to buy bullion according to market highs and lows. This change has made the bullion business more professional and less emotional.
Rising making charges and GST on jewelry are also major reasons for the decline in sales. Customers do not receive the making charge when selling ornaments, whereas in bullion, customers get the value of the pure metal. Under these circumstances, bullion traders’ inclination has rapidly increased towards bullion trade. The risk of stock in bullion is lower. There is no worry about changing fashion or design. In many bullion establishments, a large portion of the total turnover is coming from gold and silver bars, ingots, and coins.
