Gold prices drop further, boosting jewellery sales

Friday, 10 March 2023 00:20 - - {{hitsCtrl.values.hits}}

24-karat sovereign drops by Rs. 40,000 to Rs. 145,000 and 22-karat sovereign by Rs. 38,000 to Rs. 134,000
Jewellery marketers in Sea Street say reduced prices have boosted sales after 3 years
Says a boost in sales does not mean people have money, but because they have understood value of gold in crisis situations

By Charumini de Silva

The gold price has come down further this week, as a result of the rupee’s appreciation against the dollar, the Jewellery traders in Sea Street Colombo said.

As per the traders, a 24-karat gold sovereign which was at Rs. 185,000 last week has reduced by Rs. 40,000 whilst a 22-karat sovereign which was at Rs. 172,000 last week has come down by Rs. 38,000.

“Currently 24-karat sovereign is now at Rs. 145,000and 22-karat sovereign is at Rs. 134,000,” jewellers told the Daily FT.

The reduced prices have boosted sales in Sea Street jewellery shops after a hiatus of almost three years, they noted.

“After many years, we are finally seeing some interest among customers to purchase jewellery again,” a vendor pointed out.

Reiterating that they did not expect such a huge plunge in prices, they however said the low prices have got a good footfall this week to their businesses.

“It does not mean that the people have money, but they have understood the value of having jewellery in an economic crisis. By talking to our customers, we noticed the new jewellery purchases were for future investments,” he said, adding most customers have bought simple gold chains.

Another trader said they saw many customers selling their old gold during the past two years amidst the economic crisis.

“Now people are keen to buy again only because it will come in handy during hard economic conditions and to replace some of the articles that they could not save after pawning,” he noted.

Another vendor explained that people who had necessities such as weddings, attainment of age ceremonies, and ear piercing ceremonies for new-borns bought gold jewellery.

“Earlier, people used to buy gold as an investment. But with the economic crisis, we saw that habit coming to a standstill. Only a handful of customers purchased articles,” he explained.

The price of gold is generally inversely related to the value of the dollar because the metal is dollar-denominated.