Jewellery shops are scheduled to reopen in Mumbai today after 70-odd days of lockdown. Retailers in the city’s gold market hope for a revival in sentiment, as they estimate a pent up demand for marriages that had been postponed earlier would soon take off.
They also believe initial business will be redemption of old ornaments for cash, but customers may buy fresh jewellery in return.
Jewellers will adopt an odd-even formula with shops on either side of the main street open on alternative days.
It is expected that farmers might visit stores to sell their old ornaments to raise cash to buy seeds and fertilisers for kharif sowing. Urban consumers might also use cash for credit card payments, school fees etc. The market expects to see some selling pressure.
But eventually demand is expected to be good. Jewellers are trying to spur new demand by using their monthly schemes where immediate liquidity for whole purchase in not needed.
Jewellery stores in the green belts across the country like north Indian states, Bengaluru, parts of Pune and West Bengal and northeastern states have already announced reopening weeks ago. With the opening of Mumbai jewellery stores, rollover of gold and jewellery in the country will increase and business across the value chain would gather momentum gradually.
Owing to the nationwide lockdown, buying jewellery for weddings, Chaitra Navratri and Eid was muted. Some players tried selling jewellery online too, but the offtake was negligible. Wedding demand is expected to be of low caratage — smaller gramage but with heavy jewellery.
Meanwhile, jewellers are facing margin calls on gold metal loan due to appreciation in gold prices during this lockdown period. Standard gold prices have risen to trade at Rs 46,225 per 10g on Thursday from its level of Rs 42,078 per 10g immediately before the lockdown began on March 25.
Jewellers had paid Rs 4500 as one time help to skilled workers and arranged for them to travel to their native places. Now they are planning to offer higher salary and incentives to bring them back.