Jewellers in Kerala usually reserve the Malayalam month of Karkidakam, which falls between mid-July and mid-August this year, for refurbishing their shops because few people buy gold in this period, which is considered to be inauspicious. No religious ceremonies, including marriages, for which people buy gold, take place in this month.
But over the past week, people have been braving the gods and thronging jewellery shops across Kerala, which tops India in the consumption of gold, to take advantage of a drop in prices. Gold touched a five-year low of Rs 19,000 for eight grams on Friday, breaching the psychological floor of Rs 20,000.
“Most people are buying gold jewellery for forthcoming weddings,” said a salesman at Bhima Jewellers' shop in Kochi.
George Joseph, from the state’s Palakkad district, said that he could now gift jewellery weighing 100 sovereigns, or 800 grams, to his daughter for her wedding, the same amount he had given his elder daughter. “I would not have been able to afford it because prices were too high,” he said. “But now that the price has fallen, I am happy that I can.”
Several jewellers have introduced an advanced booking facility. Kalyan Jewellers, for example, allows a customer to book an item at the current rate by paying 60% of the cost and the remaining amount 60 days after that.
All branches are reporting a huge demand for this scheme, said Vijesh, a salesman at the company’s Angamali shop in Ernakulam district.
Sales over the past week have increased by 25% from the same period last year, according to the Kerala Jewellers Federation. Sales will pick up further if the price of gold continues to fall, said TS Kalyanaraman, president of Kerala Jewellers Federation and managing director of Kalayan Jewellers. But prices will soon go back to their previous level, predicted Ram Mohan Kamath, general secretary of the All Kerala Gold and Silver Merchants Association
Gold mind
Although a decline in prices inevitably boosts sales, demand for gold in Kerala is to an extent immune to price increases. The state consumes more than 75 tonnes of the 650 tonnes of gold sold in India every year. It has more than 5,000 jewellery shops and is home to some of Asia's largest gold showrooms.
Demand for gold in the state grows by 15% every year, higher than the national average of 13%. This huge demand is partly driven by growing remittances from overseas Keralites. Non-resident Keralites like to park their savings in gold because the industrially backward state offers few other safe avenues for investment, say economists.
Companies such as Muthoot Finance, Manappuram Finance and Muthoot Fincorp, which give loans against gold, flourish in the state. Together they hold 200 tonnes of gold. Kerala is also home to the world’s richest temple, the Padmanabhaswamy Temple in Thiruvananthapuram. The gold unearthed from five of the six underground cellars two years ago was worth an estimated Rs 1 lakh crore. The search followed an inventory ordered by the Supreme Court in connection with a case concerning control of the temple.
Kerala’s obsession with gold has some negative social consequences. The poor, for instance, struggle to buy jewellery that is so central to weddings. This has prompted the state women’s commission to push the state government to enact a law limiting the gold given to a bride during her wedding to no more than 80 grams.
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But over the past week, people have been braving the gods and thronging jewellery shops across Kerala, which tops India in the consumption of gold, to take advantage of a drop in prices. Gold touched a five-year low of Rs 19,000 for eight grams on Friday, breaching the psychological floor of Rs 20,000.
“Most people are buying gold jewellery for forthcoming weddings,” said a salesman at Bhima Jewellers' shop in Kochi.
George Joseph, from the state’s Palakkad district, said that he could now gift jewellery weighing 100 sovereigns, or 800 grams, to his daughter for her wedding, the same amount he had given his elder daughter. “I would not have been able to afford it because prices were too high,” he said. “But now that the price has fallen, I am happy that I can.”
Several jewellers have introduced an advanced booking facility. Kalyan Jewellers, for example, allows a customer to book an item at the current rate by paying 60% of the cost and the remaining amount 60 days after that.
All branches are reporting a huge demand for this scheme, said Vijesh, a salesman at the company’s Angamali shop in Ernakulam district.
Sales over the past week have increased by 25% from the same period last year, according to the Kerala Jewellers Federation. Sales will pick up further if the price of gold continues to fall, said TS Kalyanaraman, president of Kerala Jewellers Federation and managing director of Kalayan Jewellers. But prices will soon go back to their previous level, predicted Ram Mohan Kamath, general secretary of the All Kerala Gold and Silver Merchants Association
Gold mind
Although a decline in prices inevitably boosts sales, demand for gold in Kerala is to an extent immune to price increases. The state consumes more than 75 tonnes of the 650 tonnes of gold sold in India every year. It has more than 5,000 jewellery shops and is home to some of Asia's largest gold showrooms.
Demand for gold in the state grows by 15% every year, higher than the national average of 13%. This huge demand is partly driven by growing remittances from overseas Keralites. Non-resident Keralites like to park their savings in gold because the industrially backward state offers few other safe avenues for investment, say economists.
Companies such as Muthoot Finance, Manappuram Finance and Muthoot Fincorp, which give loans against gold, flourish in the state. Together they hold 200 tonnes of gold. Kerala is also home to the world’s richest temple, the Padmanabhaswamy Temple in Thiruvananthapuram. The gold unearthed from five of the six underground cellars two years ago was worth an estimated Rs 1 lakh crore. The search followed an inventory ordered by the Supreme Court in connection with a case concerning control of the temple.
Kerala’s obsession with gold has some negative social consequences. The poor, for instance, struggle to buy jewellery that is so central to weddings. This has prompted the state women’s commission to push the state government to enact a law limiting the gold given to a bride during her wedding to no more than 80 grams.
