Old gold jewellery on sale in high numbers

The surge in gold prices which touched a lifetime level of $900-an-ounce last week, is exciting Indian consumers to sell their gold ornaments. The yellow metal in India is purchased more for its investment value. This erratic selling by consumers has caused a drop in bullion imports, a drop in gold imports and decline in gold jewelelry sales.

According to Bombay Bullion Association president Suresh Hundia gold imports in the December 2007 quarter have slipped by 77% to amount to 40 tonnes. “In Mumbai alone, we have seen purchases of old jewellery of 30-40kg a day,” said Hundia. He also noted that Indian gold imports in 2007 may have fallen by as much as 20%.

According to bullion analysts, consumers are selling today with the hope of buying at a later stage when prices are lower. Also sales of gold scrap has increased by 16% of annual demand to value at 125 tonnes according to reports.