Fixing uniform price for gold will be anti-competition

With appetite for the yellow metal substantially reduced because of unemployment, loss of income and financial distress, there is a sharp contraction in physical demand for gold jewellery. As a result of weak demand, even monthly gold imports into the country has dwindled to low numbers in the last six months.

The worst-hit are obviously the gold jewellers who carry huge inventory of high-value gold ornaments. With sale transactions few and far in between, their cash flow is affected. If global prices correct downward for any reason, the inventory value risks a decline. It is in this context that some leading jewellers have urged the government to bring uniform gold pricing across the country, according to media reports.

Traditionally, physical demand for gold jewellery peaks during the festival season in October/ November (marked by Navrathri and Diwali). It coincides with the harvest of Kharif season crops which puts money in the hands of the rural population.