Gold market recovering from de-mon in city

Vijayawada: Gold and jewellery business, which was crashed due to demonetisation of high value notes since November 8 in the city, is now gradually recovering for the past one week as the cash flow is gradually increasing in the market.

Due to cash crunch, the entire trading activity was crippled in the city for more than two and half months since November 8. The sales of gold and jewellery are gradually picking up since February 1 after the RBI had lifted the ban on the withdrawing of cash for the current account holders.

Now, the traders are able to withdraw sufficient cash from the banks for their day to day business transactions as well as payment of wages to the staff.

Gold and jewellery business provides livelihood to more than 40,000 skilled, unskilled workers, salesmen and traders in the city. More than 600 registered shops and showrooms are in the city doing brisk business.

The trading activity was crippled after Prime Minister Narendra Modi announced the note ban on November 8. Due to paucity of new currency notes, the buyers stopped purchase of gold jewellery in the city.

Consequently, the trading activity was crippled for more than two-and-a-half months resulting in huge losses to the traders. Besides, gold smiths and gold workers had lost their livelihood more than two months.

Gold prices are facing fluctuations for the last two months due to cash crunch. The gold traders feel that the business activity will pick up as cash flow is increasing in the market.

K Ramesh, a gold trader at Governorpet, said the traders are optimistic that the sales would gradually increase as customers restarted buying gold jewellery. He said the cash is also available in more than 60 per cent ATMs in the city and flow of cash had improved a lot compared to the last month.

Interestingly, kharif season money is also flowing in the market and helping the trading activity to resume as usual in the city.

Trading activity in the city particularly the textile, gold, jewellery, auto mobiles, electrical and electronics goods mostly depend on the rural customers who spend their income earned on agriculture.

Bezawada Jewellers and Diamonds Merchants Association Secretary T Annapurna felt that the gold and jewllery trade would recover soon as cash flows are gradually increasing for the past two weeks.

Customers not only from Krishna district, but also from Guntur, West Godavari and Khammam are coming to the city for purchase of gold jewellery.