Spoilt for choice: Sulaiman (left) looking on as his staff shows a customer an array of gold bracelets. — LIM BENG TATT/The Star
Spike in prices putting a damper on upcoming marriage season
GEORGE TOWN: Gold is a wedding essential, but consumers have scaled back on purchases due to the escalating price and are turning to trade-ins to cut costs.
They are also making smaller purchases, like gold bars, coins or certificates instead of the traditional heavy jewellery.
Two weeks ago, the price of gold was at RM470 per gramme, while between January and March, it was RM430.
Currently, with global gold prices hovering around US$3,700 per ounce (about RM491 per gramme), even small chains and bangles now cost thousands of ringgit.
Federation of Goldsmiths and Jewellers Associations of Malaysia president Datuk Chiah Hock Yew said business has dropped sharply following the recent spike in gold prices.
“It’s more of a trade-in and sellers’ market now, as consumers are cutting back on gold purchases,” he said.
Chiah, a gold jewellery manufacturer who supplies about 400 wholesalers and retailers, said there is little local players can do to stabilise the price, as the factors driving the surge are beyond their control.
“We hope prices stabilise before the end of the year, but that largely depends on how the political situation in other parts of the world develops,” he added.
Penang Muslim Jewellers and Money Changers Association president Datuk Dr Anvar Hussain Rahmatullah said gold prices are being driven by the political turmoil in the Middle East and China’s massive purchases in the world market.
“Speculative syndicates have taken advantage, further fuelling the spike,” he said.
According to estimates presented at the Asia Pacific Precious Metals Conference recently, Malaysians buy about 25 to 30 tonnes of gold each year.
Trade-ins are believed to make up 25% to 40% of retail volumes, highlighting how central the recycling of old jewellery has become.
Devan Jewellers branch manager M. Krishnan said new jewellery purchases are at their lowest in years.
“Many customers now trade in old pieces for new ones during weddings, which cuts down on the actual amount of new jewellery bought.
“If families used to buy around 100g of gold jewellery for dowries, they now limit themselves to about 50g,” he said.
Krishnan said some customers have requested to place orders with a minimum down payment to secure current rates.
“Unless a deposit of at least RM10,000 is made, we cannot accept such requests.
“If the price continues to climb, it would reduce our profit margins.
“For these customers, we advise considering gold certificates or coins, which can later be converted into jewellery,” he said.
VKN Jewellers and MD Jewellers Sdn Bhd owner Datuk S. Yuvabalan said many customers have limited their orders to just the essential thali (wedding pendant) while deferring other purchases.
“It’s like a wait-and-see period as the wedding month of Ipasi approaches next month,” Yuvabalan said, referring to the seventh month in the Tamil calendar, which is considered an auspicious month for weddings and other ceremonies.
He noted an increase in trade-ins, as average income earners now find weddings increasingly expensive, with gold jewellery alone accounting for half the budget.
Varusai Jewellers manager Sulaiman Mohd Ibrahim said gold jewellery remains a must-have for Indian and Indian Muslim weddings, but families are spending far less than before.
“Previously, customers spent around RM20,000 to RM30,000 on jewellery.
“Now, they have to spend RM40,000 for the same amount of gold, because the price spike is just too steep,” he said.
