India is a country where people have more faith on investing money on gold as jewellery than any other choices available. On the day of announcement of demonetisation by Hon. PM Narendra Modi jewellery and gold sale went up. People with hard cash and black money went to the jewellery store to convert their black money before the shop closes. Some of the shops were opened till midnight and gold demand went up as well as price.A day after the announcement those in possession of unaccounted wealth were seen rushing to jewellers to buy gold. While these people were willing to pay huge premiums, jewellers were ready to accept old currency notes. The transactions took place on past-dated bills; even VAT was paid. As a result of this rush, there was a sudden spurt in demand for gold. According to market estimates, as much as $1 billion worth of gold, or around 30 tonnes, has been imported since November 9.Internationally the gold prices haven’t increased much. Post that, this decision of demonetisation has caused a drop in the business.This decision of demonetisation created havoc for a little while and destabilised the economy.This is a very good decision for long term especially for the organised sector. There could be impact on pure gold demand, which is good for jewellers.There may be some problems for unorganised jewellers, but this will help them get organised.According to a report,About 70-75 per cent of jewellers in the country are unorganised. But 25 per cent of the organised jewellers are contributing more than 80 per cent business.India is the world’s largest gold consumer and imports a sizeable chunk of its total annual consumption of around 900-1,000 tonnes.
Things to remember while buying gold post demonetisation-
*opt for hallmarked guaranteed jewellery with disclosed income.
*Always buy gold from credible and trusted jewellery houses.
*Invest in physical gold, preferably, bullion and gold coins. To make sure that your purchase is coming from responsible sources, always insist on a bill.
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