By Babra Wani
SRINAGAR: With the wedding season underway, families across Kashmir were once again turning to an age-old tradition: buying gold. But this year, the soaring price of the precious metal had made that tradition nearly out of reach for many.
Shaziya, a young bride-to-be due to marry in two weeks, said she had spent all her savings on a single item, a gold mangalsutra set. It was the only gold she could afford.
She had opted for 18-carat gold, which was less expensive than 22 carats. “I did not even buy a pair of sandals for my wedding,” she said quietly, her voice tinged with disappointment.
At Hari Singh High Street in Srinagar, one of the city’s key jewellery hubs, a seasoned jeweller explained that the cost of 10 grams of 22-carat gold stood at approximately Rs 98,000, including making charges. The same quantity in 18 carats was around Rs 83,000. “We only stock 18 and 22 carats,” he said. “Lower grades like 14 carats are not commonly tracked or traded here.”
He noted that labour costs fluctuated with design complexity, but were usually low for coins, typically made in 24-carat gold. “That is why coins are considered a better investment. Jewellery, on the other hand, especially in 18 to 22 carats, comes with higher making charges.”
This season, he said, had been unusually slow. “Normally, we would be overwhelmed with customers. But this year, sales have dropped to just five or ten per cent of what we usually expect. Buyers are only picking up light, minimal jewellery, mostly in 18 carats. The market has almost collapsed.”
Having worked in the trade since the 1950s, he said he had never seen such a slump. “We used to count on the wedding season to revive business. Now, we sit idle most days.”
Hari Singh High Street alone hosts nearly 200 jewellery shops. Almost all are struggling. “It is not just the high prices,” he said. “There is deep economic uncertainty. People are afraid to spend.”
Even if prices fell slightly, he believed the market would not rebound soon. “Gold prices have doubled in the past two years and tripled in the last four or five. I believe they will double again within two more years. People need to realise that gold is not just jewellery, it is a form of currency.”
He said prices were driven by global financial forces. “People think gold is about ornaments, but it is a financial asset. The value increases when there is instability in major economies. Look at the slowdown in America, Trump’s tariff threats, fears of recession, these things push prices up.”
He argued that buyers, not sellers, were benefiting from the current trend. “Anyone who bought gold two years ago has made a huge profit. It is us sellers who are struggling. We are releasing stock into a market that is no longer buying.”
Global Fears Drive Prices Higher
On Monday morning, domestic gold futures prices rose once again, driven by a spike in demand for safe-haven assets amid rising geopolitical tensions and economic uncertainty. According to market data, the MCX Gold August 5 contract increased by 0.26 per cent, reaching Rs 96,125 per 10 grams.
The latest surge followed renewed conflict between Russia and Ukraine. Reuters reported that Ukraine’s domestic intelligence agency, the SBU, had launched a large-scale drone offensive against Russian territory on Sunday, reigniting fears of a wider conflict.
Investor sentiment was further unsettled by former US President Donald Trump’s recent remarks threatening to double tariffs on steel and aluminium imports, raising fresh concerns over global trade disruptions.
At the same time, the dollar weakened in early trade, making gold more affordable for holders of other currencies. Domestic spot demand also remained strong, which helped sustain the upward trend in futures pricing, traders said.
Meanwhile, a potential diplomatic breakthrough loomed. Russia and Ukraine were scheduled to meet in Istanbul for a second round of direct peace talks in 2022. However, expectations remained muted given the continuing hostilities.
Often regarded as a safeguard against economic and political turmoil, gold tends to perform well in times of crisis. Analysts believe further instability in global markets could continue to support elevated bullion prices shortly.
