Tue, May 30, 2023

Gold sales witness marginal increase after RBI's Rs 2000 note withdrawal

Written by  Shgun S -- May 23rd 2023 10:51 AM
Gold sales witness marginal increase after RBI's Rs 2000 note withdrawal

Gold sales witness marginal increase after RBI's Rs 2000 note withdrawal

Gold Rush: The withdrawal of Rs 2,000 banknotes by the Reserve Bank of India (RBI) has led to a marginal rise in the sale of gold jewellery. People are panic-buying the yellow metal. However, it is nothing compared to the gold rush witnessed during the 2016 demonetisation.

The Reserve Bank of India's plan to stop the circulation of the Rs 2,000 currency note has sparked a gold rush in various cities, including Delhi, Mumbai, and Surat. The decision was announced on Friday, and the next day, several retail shops in the national capital saw a steady flow of consumers with Rs 2,000 notes looking to buy gold.

However, National Secretary at India Bullion & Jewellers Association, Surendra Mehta says that there is no high rush, merely a slight increase in customers. "Demand is not as high as it was in 2016, because there is no note ban, but rather a gradual phase-out of the (Rs 2,000) notes.”

Punjab has witnessed no gold rush after the withdrawal of 2000 denomination notes. There were some reports of panic buying in Chandigarh, Jalandhar, Ludhiana and some other parts of the state. However, the local market remained calm.

Some big cities of Haryana witnessed several customers filling jewellery shops to buy gold with pink notes. However, the local market remained mute.

Meanwhile, in Odisha, jewellery shops, filling stations and other business establishments are witnessing a huge rush.

Gold prices increased by 485 per 10 gram on Monday, reaching 60,760. It was at 60,275 on Friday. During 2016 demonetisation, it was around ₹ 30,000.

However, increased prices and the note withdrawal had little effect on gold sales in the country's financial capital. It appeared to be any other business day at Mumbai's century-old Zaveri Bazaar.

Many jewellers believe the impact has been reduced this time due to a change to digital payment mode after 2016. They say that only 10% of their transactions are in cash because the majority of their consumers prefer digital modes.



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