Update 2k - Gold Rush Due To ₹ 2,000 Notes Withdrawal

 

The central bank's decision to remove the 2,000 note from circulation has somewhat increased jewellery sales, but jewellers claim that this increase is not comparable to the rush that occurred in 2016 when the 500 and 1,000 note bans were implemented.

Reserve Bank of India's

 The Reserve Bank of India's move on Friday to swap higher denomination notes for lower denomination ones is different from the exercise in 2016 in that the higher denomination notes would continue to be accepted as legal currency.

 

precious yellow gold

The precious yellow gold, a dependable investment option for Indian middle-class residents when it was priced at half what it is today, was panickedly purchased during the 2016 exercise. But this time, the situation is different, according to a prestigious jewellery association.

There's no huge rush, only a marginal increase in customers. The demand isn't like 2016 because it's not a note ban but a slow phase-out of the (Rs 2,000) notes," said Surendra Mehta, national secretary at India Bullion and Jewellers Association Ltd.

He also denied reports that customers are paying premium prices for jewellery.

"There may have been isolated incidents. Gold prices are already very high at over ₹ 60,000, while it was around ₹ 30,000 during demonetisation," he said.

 

government guidelines require

The government guidelines require customers to submit KYC (Know your customer) details for transactions above ₹ 50,000 and PAN card above ₹ 2 lakh. For transactions above ₹ 10 lakh, the Financial Intelligence Unit of the government must be informed, he added.

On Monday, the price of gold increased by 485 per 10 grammes to reach 60,760. It was 60,275 last Friday.

However, neither the note pullout action nor the increased prices had an influence on gold sales in the nation's financial centre. It seemed like any other business day in Mumbai's century-old Zaveri Bazaar.

Digital payment methods

Many jewellers feel the impact has decreased this time because to the switch to digital payment methods after 2016. They say that because most clients prefer digital methods, just 10% of their transactions are made in cash.

Jeweller Kumar Jain reported that during the weekend, business at his store nearly quadrupled. Anyway, just 10% of buyers pay with cash, he claimed, adding that the recent wedding season had given the gold market a boost.

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