Demonetisation effect: At Zaveri Bazaar, civilians rush to convert cash into gold

A buyer who didn’t wish to disclose his name said that moments after the announcement on Tuesday night, scores of people made a beeline to the market, but their efforts were “futile”.

Written by Rohit Alok | Mumbai | Published:November 10, 2016 2:44 am
A man counting Rs 1,000 currency notes at a jewellery shop in Mumbai. Prashant Nadkar A man counting Rs 1,000 currency notes at a jewellery shop in Mumbai. Prashant Nadkar

Thousands flocked to Mumbai’s busiest gold street Zaveri Bazaar on Wednesday to buy gold, following the abolition of Rs 500 and Rs 1,000 denomination notes to curb black money. Chaos, confusion reigned and also a display of frustration at the city’s gold market, especially in Zaveri Bazaar, which was forced to extend its working hours on Tuesday till midnight when high value currency notes of Rs 500 and Rs 1,000 were removed from circulation.

Jeweller Kumar Jain left his shop in Zaveri Bazaar by 9 pm but has not stopped working since. “Following the announcement, the phone has not stopped ringing. I have stopped taking calls from unknown numbers as everyone wants to invest in gold but there is no legitimacy in the money they are giving us,” said Jain, owner of Umedmal Tilokchand Zaveri, a jewellery shop at Zaveri Bazaar.

A buyer who didn’t wish to disclose his name said that moments after the announcement on Tuesday night, scores of people made a beeline to the market, but their efforts were “futile”.

“We want to invest our money in gold but the jewellers were dictating unreasonable terms. Last night, everyone was trying to purchase together and no one had much success. Hence, we returned today to try harder,” said the buyer, who purchased two items of 10 gm gold at Rs 32,000 each through a cheque. By evening, the buyers found the terms even harder to match up as gold jewellers were selling 10 gm of gold at Rs 32,000 through cheque payment. However, it was being sold at Rs 55,000 in cash at a premium of 71.9 per cent.

In the neighbouring satellite city of Thane, gold was being sold at various jewellery shops on Gokhale Road at Rs 60,000 without any documents. The spot price of gold at MCX was Rs 30,292 on Wednesday.

“There is a rush to buy gold and everyone is desperate in this market to do away with the unaccounted money they possess. Jewellers here are selling gold at high rates without providing the buyer a bill or taking the Pan Card details. No personal details are being sought for the transaction to keep this out of the scanner of the tax authorities,” said another buyer gold who sold his gold at four different areas of Mumbai.

Some buyers have expressed concern regarding the availability of gold with “excess black money” in circulation. Akash Parekh, who booked a gold chain of 25 gm last week with a jewellery shop in Zaveri Shop, was unable to buy it on Wednesday.

“Throughout the day, we have had to not only deal with those who want to buy gold but those who have bills from previous bookings. We cannot accept their money today as it is dead money. There is still no clarity about the condition of gold in the coming days which is alarming but everyone wants to invest in gold as it is a safe haven,” said jeweller R Solanki. According to one jeweller, many of them had taken orders over the phone as predated orders. “This is the season of weddings and several people need gold — how could we deny them,” said the jeweller.

“There was a large influx of notes being exchanged at the market, first with Rs 800 then Rs 500, but fell as low as Rs 300,” said a jeweller in Zaveri Bazaar. By Wednesday evening, 22 carat and 24 carat gold items in Mumbai were valued at Rs 29,860 and Rs 31,935, respectively per 10 gm.

(WITH INPUTS FROM DEEPAK JOSHI)