Gold has lost its sheen for most jewellers in the state, with Goa Gold Dealers Association president Pramit Raikar saying the metal's ever-escalating price has eaten into business by 30%.
With gold crossing the 30,000/10gm mark this week, worried goldsmiths are hoping the upcoming festival season brings them some cheer.
"The sharp spurt in international prices and a weak rupee against the dollar have seen gold at an eight-month high, and this week's jump is the highest in over two years," says Vikram Verlekar, managing director, Ulhas Jewellers.
Sagar Pednekar, president, North Goa Jewellers Association, adds, "In Goa, MMTC in Vasco is the only gold importer. It imports approximately 124kg annually. Since the central government has stopped imports, MMTC has suspended imports."
Explaining the impact this has on the market, Verlekar, an immediate past president of the Goa Gold Dealers Association, says the only option for jewellers in Goa is to purchase from small bullion dealers who get the gold from Mumbai from leading importers. This increases the price of gold even further as VAT is inevitably applied.
"This could well lead to the trade stopping altogether," warns Verlekar.
The jewellers' woes are further compounded by the central government's decision to increase import duty and the RBI's new policy allowing India to import a maximum of only 350tonnes.
Verlekar explains that of the allowed amount, 70tonnes will be exported, leaving the domestic industry with just 280tonnes, as against a consumption of about 850tonnes.
Pednekar adds that the gold mined in India is not enough and Indian jewellers rely mainly on imports. "But to import we have to pay in dollars and with the dollar growing stronger the price of gold is only going to rise."
He says the central government's decision to suspend imports has left the industry "in chaos on where the raw material will come from".
Calling the gold market in Goa "small" in terms of consumption, Pednekar says the stoppage in mining and the drop in European tourists to the state has also led to the jewellers' drop in business.
Raikar, echoing the other jewellers, says the current developments and rising prices are leading to malpractices such as smuggling.
He points out that the price of 22 carat gold has doubled from 550 per gram in 2003 to 950 per gram today. Further pointing out that notwithstanding all kinds of developments in the market the metal has survived to remain in demand, Raikar concludes, "The festive season is approaching and despite the high prices there will be increased demand soon."
Source:- timesofindia.indiatimes.com
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