Cash crunch hits gold market

Vijayawada: Gold prices are falling in the city for the past few days due to demonetisation. Incidentally, the sales are also not picking up as buyers are not coming forward to buy the gold ornaments.

The gold prices decreased by Rs 200 per gram during the past one week. The 22 carot gram price was Rs 2,800 per gram in the last one week. However, it decreased to Rs 2,650 on Thursday.

Though the prices are falling, buyers are not coming forward to purchase gold ornaments. Due to cash crunch most of the buyers are unwilling to buy gold.

Non-availability of cash in the bank and closure of most of the ATMs are the main reasons for cash crunch. In spite of having bank balance, many customers are not able to withdraw money from their accounts.

The limit for drawing from ATM is restricted to Rs 2,000 per day. The banks are not able to pay Rs 24,000 a week due to cash crunch.

All these factors have badly affected the gold market.

The gold biscuit price also came down from R 3,15,000 to Rs.2.80 lakh in the city gold market on Thursday. The gold biscuit price shot up to Rs 4 lakh soon after demonetisation announced.

However, the price reduced and continued at Rs.3.20 lakh for three weeks.

Now, it further came down to Rs.2.80 lakh in the city gold market.

Gold traders are worried about the pathetic condition of the gold market. If the same trend continues for some more weeks, hundreds of families will suffer.

Kushal Jain, a gold trader in Governorpet, said that there are no sales for the past one month due to cash cruch. He predicted the prices may come down further in the coming weeks.

Vijayawada is one of the biggest gold and silver markets in the State with more than 600 gold and jewellery registered shops.
The demonetisation had severely affected the trading worth crores of rupees during the last one month.

More than 40,000 skilled and unskilled workers depend on the gold and jewellery trade in the city. Both traders as well as workers are now worried about the future as sales are not picking up since one month.

Bezawada Jewellers and Diamonds Merchants Association secretary T Annapurna said the sales drastically dropped for one month.
K Srinivasa Rao, a trader in One Town, said gold workers were left without work for one month and their families are suffering a lot. He said these workers do not know any other work except doing gold ornaments.

He said the families of gold smiths have to starve or take loans from others to meet their day to day expenses.