Centre's new rule comes as a boost; demand for old gold rises as jewellers roll out offers

Edappal: Competition among jewellers to buy old gold is intensifying, with a new rule introduced by the Central Government making the trade more favourable. Even jewellers who were earlier reluctant to buy gold purchased from other stores are now advertising that they will offer the best prices for gold of any kind. Advertisements featuring prominent celebrities are also being used to persuade ordinary people that selling their gold is better than pledging it as collateral.

Earlier, jewellers earned ₹80 per gram when buying old gold, but this has now increased to 5 per cent, which comes to around ₹700. Even after paying 3 per cent GST, a jeweller buying one gram of old gold can make around ₹400. This amounts to ₹3,200 per sovereign. The profit from melting the gold, making new jewellery and selling it is additional. This is one of the reasons for the growing demand for old gold.

Gold is priced around ₹300 more per gram in other states than in Kerala. Jewellers can also make substantial profits by converting old gold bought here into bullion and selling it legally, after paying taxes, in other states. The process can also be used to convert black money into legitimate funds.

Major jewellers are offering attractive deals to people bringing in old gold, seeking to capitalise on the new market conditions. The sharp rise in gold prices, which has kept ordinary buyers away from jewellery stores, is another reason behind the trend. The development could also increase the availability of gold in the market.