SRINAGAR: Gold dealers in Jammu and Kashmir are facing challenges in attracting buyers as the prices of the yellow metal have been increasing since the escalation of tensions between Iran and Israel.
The sharp increase in gold prices was triggered by escalating geopolitical tensions between Iran and Israel, as both countries adopted aggressive rhetoric and military positioning.
Such geopolitical uncertainty often triggers a flight to safety among investors, leading to increased demand for assets like gold, which is traditionally considered a hedge against political instability and economic turmoil.
In response to the soaring prices, gold traders have observed a significant change in consumer behaviour. Instead of rushing to buy gold jewellery during the ongoing wedding season, gold dealers are finding it difficult to attract customers.
According to gold dealers, the rate for 22 karat gold has increased to Rs 6,660 per gram, while for 24 karat (999 gold) pure gold, the price stands at Rs 7,216 per gram.
Mohammad Yusuf Zargar, a gold dealer, mentioned that they have been struggling to find customers for over a month now since tensions escalated between Iran and Israel.
“The gold rate has skyrocketed. We are only getting sellers, with very few buyers. Last week, the price of gold per pound touched Rs 65,000. Although the rates have now started to come down, it is still unaffordable for the middle class. Therefore, dealers have temporarily stopped selling gold per pound,” he said.
Gold dealers noted that many investors are choosing to liquidate their gold holdings to take advantage of the thriving real estate market.
“We have noticed a decrease in foot traffic and sales of gold jewellery. People are selling their gold to invest in property, believing it offers better returns and stability in uncertain times. Nearly 90 percent of sellers said they are selling gold to invest in real estate,” stated Abdul Rouf, another gold dealer.
As the wedding season approaches in Kashmir, gold dealers and jewellers assert that the soaring prices are discouraging potential buyers. “Since April, weddings and other related functions begin in the valley. People are struggling to purchase jewellery as its cost has increased over the past month,” Rouf added—(KNO)
