Gold Glitters as Consumers Cash in Amid Price Surge

As gold prices soar to historic highs, consumers in Asia and the Middle East are cashing in their old jewellery, leading to diminished demand in key markets. The trend could lower gold imports and affect the jewellery industry, despite the financial appeal of holding bullion.

Gold prices are reaching unprecedented levels, but jewellers across Asia and the Middle East face dwindling demand as consumers capitalize on the opportunity to sell their old jewellery. The surge in spot gold prices, which surpassed $3,000 an ounce for the first time, is driven by political and financial uncertainties.

Despite a buoyant wedding season in India, jewellers witness drastically reduced customer traffic. Many consumers, like bride-to-be Vaishnavi M. in Kerala, are opting to exchange old jewellery to mitigate costs, highlighting a shift in spending habits amid soaring prices.

In major markets, the trend of selling scrap gold could lead to decreased gold imports, potentially affecting the global market dynamics. As demand for new jewellery wanes, suppliers may slash import volumes, tempering the bullish gold market despite a continued strong interest in bullion as an investment.

(With inputs from agencies.)