Gold shops have seen a drop in customers of at least 30 per cent as gold prices surge to record highs, with one jeweller in Little India saying this is the "lowest point" in the store's 25 years of operations.
Mr Ramanathan Palaniappan, director of APJ Abiraame in Serangoon Road, told The Sunday Times: "The number of walk-in customers has dropped a lot, and even if they do come in, they are buying smaller amounts of gold - for example, only 5g instead of 10g. The price of gold has soared too much, so customers buy only what they need, for weddings or functions."
Gold prices soared past the key US$2,000 mark for the first time in history on Tuesday as a rise in Covid-19 cases in the United States dashed hopes of a swift US economic recovery.
The price has also been driven up by concerns over tensions between China and the US.
Gold is traditionally considered a safe haven asset by investors in times of uncertainty and crisis, such as the ongoing pandemic.
But Mr Palaniappan said: "Investors might be buying more gold, but for regular shoppers, gold is becoming very expensive. For us as business owners, it is very challenging, too, because the gold prices shoot up so quickly that it is hard to make business plans. It's hard to tell how much stock to order and keep."
Mr Dheeraj Gottimukkala, business development manager for the Malabar Gold & Diamonds chain in Singapore, said that both of its outlets are getting only about a third of their usual number of customers before Covid-19 hit.
He said: "Already, the economy is not doing well, so people don't come out and shop, and now gold prices are so high. Out of 100 customers, 100 of them will complain that it's too expensive."
On the flip side, owners of gold pieces are now able to play the role of the price setter at pawn shops.
Mr Tony Wong, a valuer working for the Soon Yi Pawnshop chain, said that he has seen an uptick in the number of customers popping into the Jurong West outlet with gold ornaments over the past week, but not all of them eventually let go of the items.
He said: "The customers cannot agree on the price. They believe that they can get higher value for their gold at other shops. Now that gold prices are so high, they also know how to calculate."
HARD TO PLAN AHEAD
Investors might be buying more gold, but for regular shoppers, gold is becoming very expensive. For us as business owners, it is very challenging, too, because the gold prices shoot up so quickly that it is hard to make business plans. It's hard to tell how much stock to order and keep.
MR RAMANATHAN PALANIAPPAN, director of APJ Abiraame in Serangoon Road.
Mr Paul Ho, director of Heng Seng Pawnshop in Toa Payoh, said that the store has seen more customers selling off their gold pieces in recent weeks. "Customers who owned these pieces for a long time are now letting go of their gold for a good profit."