During the pandemic period, the number of Indian citizens who sell yellow metal products increased sharply. This trend is related to the deterioration of the economic well-being of Indian families due to unemployment or reduced wages. The proceeds from the sale are used to pay for hospitalization and school fees, rental of housing or retail space. The gold reserve is spent as intended in conditions of instability.
Fatehchand Ranka, president of the Rajya Saraf Suvarnakar Federation of Jewelers, said that the number of people selling gold jewelry has increased almost 2 times compared to the period before the pandemic. Moreover, such measures are resorted to not only by people from the poor, but also by representatives of the upper and middle classes.
Kumar Jain, president of the India Bullion and Jewelers Association Limited, noted that if last year 10 grams of 24-carat gold could be bought for 30 thousand rupees, then this year a product with a similar weight costs about 49 thousand rupees. Owners of the jewelry business sell wedding jewelry to pay for the rental of retail space, pay off the debt on electricity bills and wages. This trend has intensified over the past 3-4 months, as the second wave of the pandemic has begun and stricter quarantine restrictions have been imposed compared to the first wave.
Shailesh Ranka, owner of the jewelry company Ranka Jewelers Private Limited, said that the number of people selling gold jewelry is increasing every day. During the second wave of coronavirus, the economic crisis worsened for many groups of the population as a result of job losses, suspension of economic activity or business bankruptcy. Having lost their sources of income, people cannot cover the current costs of housekeeping and training, repay bank loans. Before the pandemic, the majority of the population had cash savings, which allowed them to borrow to cover costs. Now reserves are exhausted, and many do not want to accumulate debts in an unstable period.
However, jewelers from Mumbai report that they do not see a large increase in customers who want to mortgage or sell gold products. The number of families who sell wedding jewelry to pay for medical services is small. The bulk of customers sell gold in order to buy real estate.
Ketan Parekh, a representative of one of the leading gold jewelry companies Chokshi Arvind Jewelers, believes that the social portrait of gold sellers cannot be eroded. People with low incomes sell precious metals the most. During the pandemic and quarantine restrictions, many citizens became unemployed, and enterprises lost 20-50% of their income or went bankrupt. However, it should be borne in mind that Indians also reduced some of their costs due to the ban on visiting theaters and restaurants, and home work reduced transportation costs.