City of Gold

‘‘When I started out, gold prices remained constant for months. Now there is a different price in the morning, afternoon and evening. Looks like I have to get computer savvy or handover to my son,’’ says Soni.

Far from the buzz of financial hub Mumbai and its online trading, in a cramped space on Jalgaon’s “gold street”, the strapping Rajasthani still relies on his old calculator. “This tiny thing is not of much use now,” he shrugs. “Look at the gold prices shooting up. I can barely keep pace.”

But in Jalgaon everyone keeps pace. They know the importance of global inflation, that the Japanese yen had a rough ride last year and that oil prices climb with every move in the Iran-US tussle.

After all, that’s what drove gold prices higher by an unprecedented 23 per cent in 2005, as investors ran for everyone’s favourite safety net. And that’s what’s killing Jalgaon’s livelihood.

In India, the world’s largest gold market, where jewellery makes up 80 per cent of the demand, investors began to cut back on their year-end purchases. And analysts predict that buyers are unlikely to be drawn back in the first half of this year.

BEHIND the imposing Jalgaon municipal corporation building, hidden by haphazard construction, is a quiet and nondescript bylane. There resides one of the largest concentration of jewellery businesses in the country. Peep into any cubbyhole and you’ll find young men hunched over pieces of gold, gently moulding them into long Devdas necklaces and traditional jewelled attachments for earrings that wrap around the ear. Turn any corner and there’s a jeweller tempting you with necklaces.

Deep within the streets you hear snatches of conversation in chaste Bengali. A little further, the dal-bhatti-churma flavour kicks in. In Jalgaon’s gold industry, everyone is from out of town. Most jewellers trace their origins to sandy Rajasthan, most craftsmen to Bengal. Choler dal is as popular as the bharta, and even Soni has picked up Bangla.

But today, Saraf Bazar is slowly losing its glitter as wholesale gold prices muscle past the Rs 8,000 per 10 gm mark. For a city that once bustled with shoppers from across the country, today Jalgaon’s famous gold street is almost deserted.

The only people doing brisk business are the hawkers who sell colourful baubles and beads. Squinting through his scratched glasses, 52-year-old Ibrahim Hashim slowly strings beads. His cracked fingers find it difficult to keep up with demands from young girls out for Sankranti shopping.

Around him, over 300 jewellery shops wait for business to pick up. Over plates of hot bhakri and spicy baingan bharta (garnished generously with peanuts, spring onions and dry coconut), they discuss the bullion market. As Jalgaon keeps a worried eye on gold prices, in Saraf Bazar and adjoining Maroti Peth, they have started counting their daily losses.

MARATHI literature graduate Srikant Vasant Sonar listlessly opens the shutter of his 50-year-old matchbox-sized shop. He slowly dusts the jewellery on display, straightens things on the counter and then strikes a match. Lighting an agarbatti, he prays for good business, before settling down under his grandfather’s photograph for the endless wait.

“There are days when we don’t sell anything,” says the young proprietor of Sree Jewellers. “Only our old customers still come to us and it is usually for repair work. No one is buying and it is slowly ruining us.”

His neighbour Vishwanath Aggarwal now earns Rs 2,000 on a good day, down from Rs 10,000 previously. “We are surviving on the money we made last year,” he says, as he watches people scurry past his shop.

For 24-year-old Dheeraj Brijlal Verma, there couldn’t have been a worse time to take over the family business. Sitting amidst his craftsmen, who are sticking stones onto jhumkas, he says there’s been a 70 per cent drop in customers. “Commodities trading is pushing gold prices up and everyone is suffering losses. I don’t think my children will make any money from this shop, not when a 50 gm necklace costs about Rs 40,000.”

The despondency is not obvious at first glance. For starters, the grain market, lined with trucks loading Jalgaon’s special toor dal for exports, completely overshadows the jewellery street. But fight your way past sacks of grain and overflowing baskets of guavas and you stumble upon the famous street.

In the middle of the chaos, Bafna Jewellers’ imposing showroom is like a tourist oasis. Past the guard and the shoe stand, the shop is a maze of well-stocked counters manned by enthusiastic salesmen. The mirrored walls run from ceiling to floor, giving the not-so crowded store a busy feel.

Bafna’s rival Rajmal Lakhichand Jewellers is one of the oldest in the business and is often credited with putting Jalgaon on the gold map. Around since 1854 and known for the purity of their gold, they say they were responsible for the expansion of Jalgaon’s gold market.

As he keeps an eye on his salesmen through the big glass windows of his plush office, Ishwarlal Jain, chairman of RL, recalls how when his family moved from Rajasthan to Jalgaon, the now famous gold street was not much to write home about. But today, his entire family, including his daughters-in-law, is involved in the almost

Rs 300 crore business. “The girls manage the designs, which change every week,” says Jain. “Earlier people sat with the jewellers, gave designs and waited for them to be made. Now they buy off the shelf and we need to improvise.”

Jain knows he can ride out the 20 per cent drop in business. ‘‘Gold has a social standing and is also considered a social security. So customers will keep trickling in.’’

Rattling off figures, the grand gold man of Jalgaon adds: ‘‘There are a combination of factors pushing prices up. First it was Iran’s nuclear policy, then central banks increasing their gold stocks and, of course, the futures market. And we don’t see the rising trend changing. In fact, all those who wait for prices to drop before buying will end up paying more.” Ratanlal C Bafna agrees: “We see prices going through the roof and hitting the Rs 10,000 mark.”

Today in Jalgaon, they don’t like the Japanese. The town’s five lakh population squarely blames Japan for the turbulent times.

‘‘The Japanese government is buying a lot of gold, directly affecting the prices,’’ Bafna explains. “There is a demand-supply imbalance in gold. Things are going to worsen.”

Japanese investors led the global gold rally at the end of last year during a spell of yen weakness. Their enthusiasm for the blonde metal shows no sign of letting up in the new year.

FOR software engineer Rajnish Dhake, it’s already a tough market. Out to buy his wife a pair of earrings, the banking software expert spent hours in Saraf Bazar before settling for a 2 gm pair. “It’s not what my wife liked, but this is all we can afford today,” he shrugs.

A few shops away, housewife Sheela Chandwal and daughter-in-law Susila are trying on bangles. “But don’t think we are buying these straight off the shelf,” Chandwal laughs. “We want to exchange our old gold for something new.”

This exchange means that the demand for the chains SK Sameer makes in one of the thousands of workshop-cum-homes in Maroti Peth is dropping. For the Midnapore (West Bengal) resident, one of the over 5,000-strong workforce, this is not a good time for slack business. For every 200 gm chain he makes, he makes 2.5 gm worth of income.

“There are others who are lower in the hierarchy and earn just Rs 1,200 a month,” says Sameer. “The minimum rent in Jalgaon is Rs 1,000 for a room. You do the math. As the prices go up, many boys are returning home empty-handed.”

Sharing his concern is the Jalgaon Shahar Saraf Association. “People come here because all our jewellery is checked for quality, stamped and there have been no cases of cheating ever,” says 10-time president Gautam Jain. “There has been a storm in designs and varieties, showrooms have opened in villages and the number of dealers is up by 10 per cent. But this sudden price surge has undone so much.”