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All that glitters could be jewellery con



After Rs 11,300 crore Punjab National Bank fraud involving Nirav Modi, and Gitanjali GemsBSE -4.93 %, consumers appear to be wary of purchasing gold and diamond jewellery. Many are also getting suspicious of what they had bought earlier. Jewellers claim there is an increase in the number enquiries from customers for getting their pre-purchased jewellery re-checked for quality and authenticity of gold and diamonds. Jewellers also say that gold demand has taken a hit amid increasing suspicions of counterfeiting and increased prices.

Jigar Soni, a jeweller based in Ahmedabad, said, “The fraud has caused greater damage to the industry as buyers are refraining from making purchases altogether. Interestingly, several of them who have purchased gold and diamond jewellery from a branded jewellery showroom bring it to us to recheck quality.”

As a result, gold demand has been adversely hit. “Such scams tarnish the image of the entire industry. As such gold prices are high since the past two-three weeks – hovering around Rs 31,500 per 10g mark in Ahmedabad – due to which demand is a little low-key. Now, it has been further affected with a shaken confidence among buyers. We are unable to take advantage of a buoyant wedding season,” Soni added.

“The jewellery consumption has reduced to one-third of what it is during the peak wedding season. Typically some 70 tonne gold is traded in the state during the season and this is expected to come down to 40 tonne. That apart, even bullion traders are not investing in gold of late, which has also led to a decline in demand,” said Shanti Patel, president, Gems and Jewellery Trade Council of India.

Getting jewellery rechecked is a usual practice for most customers. However, such requests have gone up in the past 2-3 weeks. Most people have got their lockers opened only to get the jewellery re-checked. And some who had purchased branded jewellery online have also approached local jewellers for quality check.

“At least 20% to 30% of the samples we received fail quality checks and are found suspicious. We ask customers to get them tested in laboratories for which additional charges would apply, however, most customers are reluctant to do so,” said Rohit Choksi, another jeweller.

Explaining the type of impurities, Choksi said, “Gold jewellery typically has fake hallmarking symbols while diamond jewellery also has CVD diamonds which are synthetic diamonds and not original ones.”

Estimates by jewellers indicate, one needs to pay Rs 30 per diamond to get a 10 carat diamond tested and somewhere around Rs 200 per jewellery piece for testing gold jewellery. The prices may vary as they depend on carat value of diamonds and weight of gold jewellery too.

Courtesy: The Times of India
Image courtesy: NearSay

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