Date:18/08/2008 URL: http://www.thehindu.com/2008/08/18/stories/2008081858340200.htm

Tamil Nadu

Gold lacks glitter

M. Soundariya Preetha

Photo: K. Ananthan

Cautious: Choosing jewellery too has become price-related. –

Jewellery purchase by Coimbatoreans and those from nearby places in the last few months seems to be as varying as the gold prices.

Sales here have declined by at least 40 per cent in the last six months, says B. Sabarinath, secretary of the Coimbatore Jewellers’ Association. However, for the last few days when the prices went down, people started active purchase again.

When gold prices were hovering at Rs. 300 or Rs. 400 a gram, people used to buy jewellery as a fashion product. Now, they look at it as an investment too, he says.

In Bangalore or Chennai, a lot of youngsters with purchasing power buy jewellery for smaller amount, such as just a pendant or a pair of studs. This trend is yet to take off here on a large scale. However, such sales have just started happening for special occasions such as Valentine’s Day. This is yet to emerge as a regular purchase here, he says.

According to B.A. Naazzar of Tanishq Jewellery, prices do not seem to affect the purchasing trend of youth. With the availability of plastic money, impulse buying continues for any fashion product. About 15 per cent of customers coming to his outlet buy fashion jewellery and this number continues.

The trend, however, is not so bright with regard to the general buyers.

A year or so ago, when the real estate sector was active with investments and purchases, a lot of people, especially those from the rural areas used to come to Coimbatore to buy gold jewellery in bulk when they sell a piece of land and have cash in hand. This has come down substantially now, says a jeweller here.

Apart from gold prices shooting up, another reason for the dip in sales is the sluggish movement of other sectors and general price rise, he adds.

Former president of the association, D.R. Raghunath, adds that India usually imports 354 tonnes of gold between January and June. And, 40 per cent to 45 per cent of this is consumed by the Southern States. This year, the imports in the first six months were just 137 tonnes. Even those who buy for specific occasions such as weddings, purchase only what is essential. Gold has resale value and hence more people look at it as an investment now, he says.