City’s Sarafa Oli saw gold glitter fade even before PM Modi’s call

Nagpur: The stretch along Central Avenue leading into Sarafa Oli — Nagpur's age-old gold market — is dotted with glittering billboards of leading gold brands. But inside the narrow lanes of the market, the mood is starkly different. Empty shops, sparse footfall and anxious traders tell the story of a market losing its shine amid soaring gold prices and rising import duties.Traders said the dip in demand seen in Nagpur's bullion market had begun much before PM Narendra Modi's appeal to refrain from buying gold and the subsequent duty hike. According to jewellers, the real impact of both factors is expected to unfold over the coming fortnight.Gold prices in Nagpur touched 1,69,200 per tola (10 grams) on Wednesday, registering a steep jump of nearly 10,000 in just two days. Traders attributed the surge to the recent increase in customs duty on gold imports from 6% to 15%.Though the revised duty applies only to fresh imports, jewellers have already factored the higher levy into current prices, passing the burden on to consumers."The increased customs duty eventually impacts existing stock also because jewellers will have to replenish inventory at the new rate," explained a trader in Sarafa Oli. "Similarly, whenever duty is reduced, prices fall immediately in the market," he said.The downturn, they said, actually started nearly a year ago when gold prices first crossed the psychological barrier of 1 lakh per tola in April. Since then, the precious metal has steadily moved out of reach for middle-income buyers, sharply affecting retail demand.Interestingly, while fresh buyers are staying away, many people who had mortgaged their gold ornaments are now rushing to reclaim them. Traders said borrowers, especially from rural areas, are repaying long-pending loans because the current gold value makes recovery financially worthwhile. Dhruv Gupta, who primarily deals in business-to-business segment, said demand from retail jewellers has witnessed a drastic fall. "Our business with retail outlets in terms of volume has dropped to nearly 40% of what it was over a year ago," he said.Sujit Soni, president of Navyug Sarafa Association, said consumers were already reluctant to buy gold because of the unprecedented prices. "Leave aside the Prime Minister Modi's appeal, people are simply unable to afford gold now. But given PM Modi's influence, we expect business to dip further over the next 15 days," Soni tod TOI.The silver market too has taken a hit. Neeraj Dharashivkar, secretary of Navyug Sarafa Association, said small silver purchases for gifting — once a common practice — have nearly vanished.