Leaping prices hit goldsmiths

[Neo]

Leaping prices hit goldsmiths

Friday, 12 Mar, 2010

Consumers have lowered their purchase of gold and prefer to have their jewellery redesigned or opt for artificial jewellery. - File photo World

Demand of gold is falling globally because of rising inflation which in turn is shrivelling the incomes forcing jewellers to slash workforce or switch their trade.

A Dawn survey revealed that the gold prices shot up rapidly in last four or five years making it impossible for people to shop yellow metal.

The price of 10 grams gold in 1998 was Rs5,000 which went up to Rs9,800 by 2005 and to Rs39,000 by 2009 – the price not affordable by the majority.

The fast climbing cost not only retarded sales and pushed a number of goldsmiths to opt for a different trade but deprived a number of employees of their earnings.

Hakim Ali Shaikh is attached with the trade since more than 30 years and he told Dawn that the gold prices began increasing from 1970 when 10 gram was around Rs150-160 with buyers available until 2000, However, by 2005 the sales had gone down tremendously because of the fast leaping rates and the buyers almost vanished by 2009 when prices peaked to Rs39,000 which totally destroyed the trade.

Usually a customer used to purchase 50-100 grams of gold for the marriage of their sons and daughters which now has nosedived to a mere 50 to 60 grams and a maximum of 80 grams because of skyrocketing prices, he said adding that in many cases jewellery is brought for redesigning as people are now unable to buy now stuff.

Around 15 goldsmiths have quit their businesses as customers have disappeared and they are not in a position to meet their household expenses but it is the most lucrative venture for investors, he said.

President, Sarafa and Zargaran Association Nawabshah, Mohammad Ramzan Khokhar said that their businesses have faced the worst scenario during the last five years as sales have now almost halted with the majority of customers bringing in their ornaments for redesigning. Mohammed Aslam Shaikh, a former president of the association, said that declining sales have also hit the labourers who are forced to look toward other job avenues.

People realising their inability to buy gold are now depending on artificial jewellery for the wedding of their children, he said as number of those related to real metal have re-established their trade in artificial jewellery.

He blamed the bookies and brokers for damaging the gold trade as gamblers were now investing billions in it, the world over. Another reason may be attributed to Indian and Chinese move of converting their foreign reserves to gold from dollars, he said.

He called upon the government to take notice of the situation and save the bread-and-butter of two million people attached to this trade by controlling gold prices through some legislation.

A labourer, Israr, who used to earn Rs10,000 per month through making now hardly earns Rs5,000, particularly when prices were rising with no end in sight. Presently, he works for 15 days and remains idol for the rest of the period and was wary as to what would happen when there’d be no work which seems not, too far way. Shoaib Hassan, another worker said that he is unable to feed his family as the rising inflation was adding fuel to flaring gold prices.

Some customers had come to buy at least one set for the wedding being taking place in their family, but went empty handed as the prices were simply unaffordable. Marriages require a host of items and few among them are necessary which leaves the parents hanging between the hope and despair, said a customer.

Another appealed to the government to come to their rescue and help them in getting at least some gold jewellery.

http://www.dawn.com/wps/wcm/connect/...iths-230-za-07