Recycling of gold has increased with a raise in import duty on gold and the gradual increase in its price. Figures from gold refineries and jewellers indicate that 70 kg of gold is being recycled in Ahmedabad every day. That is a huge increase from 40 kg a day in 2019-20.
Recycling of gold is usually seen when there is inflation. People exchange gold for cash and fresh gold buyers decrease as people prefer to exchange old gold for new gold. Many people have suffered due to the pandemic situation and the lockdown. They lost their sources of income. Accordingly, many had to sell their gold to meet cash requirements. At that point of time, gold prices were also going above 50,000 and hence, most of them got good returns, says Haresh Acharya, director of India Bullion and Jewellers’ Association.
Calculations from the World Gold Council say that gold recycling has increased in India over the past five years. India is currently the fourth largest gold recycling country. Another feature that is coming up is that Ahmedabad jewellers have also begun internal gold recycling. Jewellers are now recycling jewellery that are not taking off into newer designs. This helps in avoiding the 5% higher import duty that comes with buying fresh gold.
Nishant Soni, who owns a gold refinery, said that gold prices rose quickly after Covid came due to economic uncertainty. That showed more people exchanging old gold to purchase new jewellery. Hence, gold recycling has increased. Ahmedabad now sees 60-70 kg of gold recycled every day. He also said that 40% of such jewellery is from jewellers who recycle old jewellery to make fresh pieces for jewellery exhibitions and festivals and marriage season. The price of gold was Rs 53,000 per 10 g in Ahmedabad on Saturday.