Indians are recycling jewellery to counter the soaring gold prices; experts reacts 

Over the last four weeks, a number of variables, including a bad macroeconomic climate, geopolitical danger, and central banks purchasing gold, have caused gold prices to rise to all-time highs.

Due to a decline in domestic demand brought on by the growing price of gold, Indians are choosing to recycle their old jewelry during the holiday season.

“We have seen higher investment demand for gold in India through various gold investment instruments. Gold prices have gained nearly 8.70% CYTD right before summer wedding season and auspicious Akshaya Tritiya when demand for jewellery and coins tends to remain higher. The record high gold prices may impact India retail jewellery demand going forward as consumers may refrain from buying at current price levels. The lower demand may also affect India gold imports in coming months reasoning with higher prices and weaker rupee,” stated Tapan Patel, Fund manager-Commodities at Tata Asset Management.

About gold recycling?

The World Gold Council defines recycled gold as gold that has been sold for cash by customers or other individuals along the supply chain, such as jewelry manufacturers getting rid of outdated stock. This definition does not include transactions in which gold is traded directly for other gold, like when retail customers trade in their old jewelry for new.

Ninety percent of the world’s supply of recyclable gold is used in printed circuit boards and other components, mostly from outdated jewelry or industrial garbage.

Gold Recycling: A Rising Industry

“Of late, we have been witnessing growth in gold recycling demand from a section of customers at our stores in India due to gold price rise. From April to December 2023, we witnessed 48% of the gold was recycled. Over the last three months, we have observed that 50% gold has been recycled across our branches in India,”  MP Ahammed, Chairman, Malabar Group, mentioned in onversation with Livemint.

“Gold is an integral part of the socio-economic ethos of the country and gold jewellery is perceived as a popular adornment and investment tool. Gold price rise may have a near-term impact on volume-based demand. However, the long-term gold jewellery demand outlook remains robust,” Ahammed added.

According to World Gold Council, India’s gold refining industry has experienced tremendous change over the last ten years, with formal operations rising from less than five in 2013 to 33 by 2021. The nation’s organized gold refining capacity has increased significantly as a result of this expansion; it is now expected to be 1,800 metric tons, up from just 300 metric tons in 2013.