Kolkata-based Anjana Mitra has her daughter’s wedding in November. With skyrocketing gold prices, she has now decided to remake and polish some of her existing jewellery, instead of buying everything for her daughter’s wedding.

In the last four months, gold has been very volatile, up by 8-10 per cent, which conveys instability and uncertainty among consumers who otherwise regularly invest in the yellow metal. People are shying away from buying fine gold at `57,000 per 10 grams.

“For the sake of jewelry the demand is almost negligible, but there is a demand for bullion alike,” says Neeraj Khanna, director, Niraj Krishna and Sons Jewellers.

When consumers see a steep rise in price they hesitate to buy gold. “Customers usually wait for the prices to stabilise at a range value of 1-2 per cent of the volatility. Only then markets are able to regain trust in the purchase gold,” explains Abhishek Raniwala, Co-founder, Raniwala, a jeweller that has existed since 1881. Delhi-based Aakansha Singh too is putting away her gold purchase for similar reasons. She feels the price is too high for her comfort.

It is very important we contextualise the current rise in gold prices within the peculiar socio-economic circumstance of the pandemic. “The situation has created confusion in the consumer’s mind on whether to buy or invest in a product like gold jewellery at a time like this, when the business and basic livelihoods need funds as well. Consumers are also questioning the need for gold and precious gems in a social situation where they have nowhere to go, and no one to show off to,” argues Amit Mehra, MD, Mehrasons, Yashpal Mehra Group.

He, however, adds that with unlock-down and restrictions being relaxed, jewellers are seeing customers arriving - especially those with disposable income or professionals looking to invest in timeless pieces of jewellery.  He maintains the footfall will take a while to return to pre-COVID days.

“We are seeing a mix behaviour from consumers - new purchases and exchange of old gold for new gold. What we are seeing is - families, as well as the bride and groom are looking for lighter and more wearable pieces (medium to light-weight pieces). The pieces they are choosing have more functional use, more versatility, as opposed to heavy gold jewellery,” says Mehra.

Since people are looking to remake jewellery they already own and jewellers are cashing in on that. The situation is such that nobody wants to lose out on business.

C. Krisniah Chetty Group of Jewellers is offering a program - Beat the COVID Blues - offering a designer to sit with a consumer to recreate or restore or repair existing gold jewellery.

As Dr. C. Vinod Hayagriv, Managing Director at C. Krisniah Chetty Group of Jewellers explains, “The idea is to make a new piece out of an old one and that way you do not have to buy new jewellery yet save money.” However, he adds that when it comes to the wedding market, some people are advancing their purchases and buying to beat the inflationary prices of gold.

There is even a trend of selling existing gold jewellery to meet liquidity needs, but that is mostly the case with the lower socio-economic segment who are unable to meet their expenses. “Jewellery is not really the first asset, one is ready to sell to meet their needs. Jewellery is seen as a sacred investment and auspicious asset, usually passed down from one generation to another. It holds a lot of emotional value too. I personally do not feel that the situation has come to the point where one would sell off gold so easily,” argues Raniwala.

As of now,  the yellow metal is certainly full of glitter. Make a wise decision on whether you want to buy physical gold or ornaments.