Gold prices have now fallen sharply. In January, the price per 10 grams reached a record of Rs 1.8 lakh. Now it is around Rs 1.4 lakh. In June alone, the price has fallen by Rs 15,000. There is a growing fear of further decline in prices. Therefore, instead of exchanging jewellery, customers are directly selling it and withdrawing cash. They are busy selling old gold in a hurry to make a profit. It is believed that the price has reached its highest level and will not go up again. Therefore, they are now eager to sell their existing jewellery before its value falls. It is expected that the price of gold will fall further and it may come down to Rs 1.2 lakh. Due to this, customers are preferring to sell it for cash and make a profit instead of exchanging their old jewellery for new jewellery.
Surendra Mehta, National Secretary of India Bullion and Jewellers Association (IBJA), said that Indian consumers are taking advantage of the high price of gold and withdrawing cash. They believe that the price has not gone up to the highest level yet. So far this month, the price of silver has fallen by Rs 45,000 per kg. It is estimated that the price of both the precious metals may continue to fall further. Indian households are selling old gold. According to the India Bullion and Jewelers Association (IBJA), consumers sold about 50 tonnes of old gold in the April-June quarter. This is 43% more than the same period last year.
Mehta said that the price of gold has fallen from Rs 1.8 lakh to Rs 1.4 lakh. But people are afraid that the price may fall to Rs 1.2 lakh. Due to this, they are selling gold and taking cash. This trend is giving a boost to the organized gold recycling industry in India. Due to the high price, people are recycling gold instead of keeping it at home. According to industry officials, consumers are now looking at gold as a financial asset that can be converted into cash when the right price is available. This has led to a steady supply of recyclable gold for refiners and jewellers. Companies that buy gold have also seen an increase in their stock of scrap gold.
Muthoot Exim has seen a 40% increase in scrap gold collection across its network of over 100 ‘Gold Points’ across the country. Muthoot Exim CEO K.U. Shah says that consumers are now more comfortable exchanging their gold for cash in an organised and transparent manner. This not only gives them the true value of the gold but also strengthens the domestic gold ecosystem by reusing the precious metal. The company buys scrap gold from consumers and processes it into 24-carat pure gold. It is supplied to jewellery and coin manufacturing companies. This process reduces dependence on new mining and increases the availability of the metal in the country. India imports a large part of its requirements.
Gold worth about $72.4 billion was imported in the last fiscal year, while the amount of gold recycled was estimated at 125-150 tonnes. According to the industry, if the current trend continues, the amount of gold recycled is likely to increase to 200-250 tonnes by 2026. It is estimated that there are about 30,000 tonnes of gold in Indian households. Industry officials see organized recycling as a big opportunity to reduce dependence on imports.
