Jewellers consider reducing gold caratage in jewellery to combat high gold prices

The soaring prices of gold are prompting Indian jewellers to consider reducing the caratage of gold in manufacturing studded jewellery, in order to make the jewellery affordable to the average consumer, as reported in a leading Indian daily. The standard purity of gold used in studded jewellery in India is 18 carat, and now such studded jewellery is being made in 14 carat gold, which could be further reduced to 9 carats if the gold prices touch Rs.20,000 per 10 grams, reports add.

Currently, the festive and bridal seasons are prompting sales of studded jewellery, but jewellers are concerned the rising pattern of gold prices may dwindle consumer demand in the mid-term.

While the reduction in caratage could make the jewellery more affordable, it carries challenges of working with gold, as the increase in impurity makes the gold harder. Also, it may have to go down well with the mindset of the traditional Indian consumer, who values purity of the jewellery and associates gold with auspiciousness, status, investment source etc. On the brighter side, there seems to be an increase in the demand for studded jewellery like diamond jewellery and the reduction in gold caratage could encourage demand and sales despite the peaking gold prices.