Chennai, Apr 21 ( ) : Most of the jewellery shops in Chennai today sported vacant shelves as there were four times more sales as prices crashed on April 12.
Being a Sunday, the sales were dull. Last Sunday, however the amount of gold jewellery sold was 27 kg, since it came two days after the price crash. The jewellers usually do not sell from the display racks. This time however they had to dip into the display racks to meet the high demand. The stocks are expected to come only next week.
If the gold does not come in and buying trend continued, the shops left with few stocks will have to display, no-stock-boards. After the price crash, gold is in short supply since traders did not want to buy it and lose money if prices fall further.
The main agents of gold are State Bank of India, Nova Scotia Bank and Axis Bank. These banks are now not holding stocks and are awaiting supply. Old jewellery is not sold after the price crash and this has dwindled the supply chain and business of recycling of old jewellery.
Nova Scotia Bank admitted that the market was facing a crunch of gold. Last week, retailers placed bulk orders and for gold manufacturing countries it would take one week, and expect fresh gold to come only on Monday, as it would take time for the importers to complete the formalities. Despite a 25% rise in sales, no jewellery shops had anyone coming for exchange of old ones.
The jewellery shops crying about no stocks are seen as a ruse to hoard gold and it shows a rise in prices. A two percent rise was seen last week and in International market, the prices will see a rise of $1800 per ounce. This will be further triggered by growing demand from India.
On Monday, the markets would open to see further rise and retailers will stand to sell the existing jewellery at higher prices.