No panic buying of gold post Rs 2,000 notes' withdrawal

Tribune News Service

Chandigarh, May 21

Unlike the situation witnessed in 2016 during demonetisation when customers made a beeline for converting their cash into gold, there is no panic-buying of the precious metal after the announcement by the RBI on Friday to withdraw the circulation of Rs 2,000 denomination notes by September 30. The central bank, however, clarified that Rs 2,000 notes will continue to be legal tender.

No such report from markets

• According to field reports from Jalandhar, Ludhiana, Chandigarh, Ambala, Karnal and Panipat, jewellers said though there were reports of panic buying in big cities, they had not experienced any such issue in the local market

According to World Gold Council estimates, there are 3,85,000-4,10,000 jewellers in India. Of the total, roughly 35 per cent jewellers are based out of the northern states and constitute 15 per cent of the total gold demand.

According to field reports from Jalandhar, Ludhiana, Chandigarh, Ambala, Karnal, Panipat, jewellers said though there were reports of panic buying in big cities, they had not experienced any such issue in the local market.

“On the very first day of the announcement, we did receive queries from the people, but if you ask me about the conversion, it’s miniscule as it is still a legal tender. There has not been much impact on sales, more or less its same,” said Manoj Dhanda, general secretary, Ludhiana Jewellers Association.

Pankaj Arora, national president, All-India Jewellers and Goldsmith Federation, said, “There is no such panic as the RBI has kept a large window of four months as the deadline for withdrawing the pink notes from the market. Moreover, in the past few years, jewellery business has become well-organised due to strict Know-Your-Customer (KYC) norms, which restricts illegitimate transaction.” Currently, gold prices have corrected to around Rs 60,600 per 10 grams in the region.

Anil Talwar, co-chairman, Gems & Jewellery Committee, the Federation of Indian Chambers of Commerce & Industry (FICCI), said, “Unlike the Rs 500 and Rs 1,000 notes in circulation, the Rs 2,000 notes constitute only a relatively small portion of the total currency. People logically will have only small quantities of these notes and, moreover, the currency has not ceased to exist. Hence, the kind of panic that was visible during note ban is unlikely this time around.”

The RBI had stopped printing the notes in 2018-19 and these are rarely in circulation.

Jewellers in Ambala, Karnal, Kaithal and Panipat said there was no panic among the masses so far, so there is no rush in the jewellers’ shops. Sources said the jewellers in Hansi, Hisar, had increased the prices for the customers, who are coming for the purchase of gold ornaments with the currency notes of Rs 2,000. However, another jeweller from Hisar said there was not much difference in the prices at their shop.

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