Gold and Silver Smash Records: Jewelers Halt Purchases as Sales Drop Up to 70%

New Delhi: Gold and silver prices continue to surge, breaking previous records. On Wednesday, gold rose nearly 4% while silver jumped about 6%, prompting jewelers to halt purchases as consumer demand drops sharply.

Gold Hits New Heights
In Mumbai’s spot market, 10 grams of 999-purity gold touched ₹1,59,027. This represents an increase of almost ₹5,000 in a single day, and prices have surged over 20% in January alone. Analysts attribute this rise to escalating geopolitical tensions worldwide and expectations of a U.S. Federal Reserve rate cut.

Jewelers Stop Buying
Vimal Goyal, President of the Delhi Bullion and Jewelers Welfare Association, said continuous price increases have forced jewelers to stop buying gold. Customers are also refraining from purchases, and jewelers are meeting demand primarily through exchanges of old jewelry rather than new purchases.

Sales Plummet
Harshad Ajmera, MD of JJ Gold House, stated, “Gold prices have risen over 30% this month, resulting in a 70% drop in bullion sales. Jewelers are purchasing less because customers are bringing in old gold to meet their requirements.” Goyal added that gold jewelry sales in Delhi have fallen by nearly 50%.

Shift to Gold ETFs and Digital Investments
Akh Comboj, Vice President of India Bullion and Jewelers Association, noted a shift in investor behavior. Customers are now investing in gold bars, coins, and gold-backed instruments such as digital gold and ETFs, rather than buying jewelry. Many are opting for small, regular investments instead of large one-time purchases.

Reasons for the Surge
Analysts cite rising global geopolitical tensions as the main driver behind the surge. U.S. President Donald Trump recently threatened Canada with a 100% tariff over potential trade agreements with China and raised tariffs by 25% on autos, pharmaceuticals, and lumber from South Korea. These developments have increased demand for safe-haven assets like gold and silver.

MCX Rates
On the Multi Commodity Exchange (MCX) Wednesday afternoon at 3:15 PM, gold was trading at ₹1,63,780 per 10 grams, up 3.86%, while silver rose nearly 6% to over ₹3,76,520 per kilogram.