Plunge in prices sparks gold rush in Little India

Buyers snap up bulkier items, bars, but shops in other areas are quieter

SHOPPERS are flocking to buy gold jewellery and bars following news that the precious metal has plunged in price.

Little India is at the centre of the gold rush, with sales at some shops in the area leaping by up to 40 per cent in the past week.

"Customers started pouring in after news of the fall in prices," said GMT Jewellers manager Dawood Mohaideen, 46. "We have about 30 to 40 per cent more customers now, who are mostly migrants from India."

The price of the precious metal has slumped by 17 per cent since late last year. It fell to its lowest level in two years on Monday, dipping to below US$1,400 an ounce.

Goldsmiths and jewellery shops in Little India reported a shift in the types of products being bought, with sales of bulkier items and gold bars going up.

"On an average day, we would sell maybe one or two gold bars," said Meena Gold Jeweller managing director Janardan Rai, 50. "But on Tuesday we managed to sell 10."

A few shops down, Arthesdam Jewellery owner Francis Woo, 50, has noticed a similar change. He said: "Before the fall in prices, customers were more interested in smaller and thinner items, probably because they were cheaper. Now, they're interested in bigger items like chains and gold bars."

But the boom in business was not felt all around Singapore.

Over in Woodlands, Jili Goldsmith Jewellery owner Robert Lim said business had declined slightly. "Customers will refrain from buying until the prices are more stable," said the 59-year-old. "Most of them are waiting to see if the prices will drop even more."

This sentiment was echoed in Bedok, where Chin Heng Goldsmith owner Lim Chin Yeow, 57, said most customers were simply coming in for a look.

"I've got about 30 per cent more enquiries about prices of our products, and they always ask if it will continue to fall. But in terms of actual sales there has not been a big increase."

Mr Roy Tan, who is unemployed, was looking at jewellery at a shop in Chinatown but did not buy anything.

"After hearing about the fall in prices, I think it could be a good investment," said the 48-year-old. "But I'm not rushing into anything yet."

Some put the spike in business in Little India down to cultural factors. "The traditional Indian wedding season, coupled with an upcoming festival called Akshaya Tritiya, is helping boost business for us now too," said Mr Rai.

"People are buying gold as gifts or for themselves to wear at the celebrations, and this coincides nicely with the fall in prices."

Pawnshops have also noticed business picking up. Jewellery sales at the Valuemax chain have increased by 20 to 30 per cent over the past week. Executive director Yeah Lee Ching said more customers have also been buying 1kg gold bars.

Gold items sold at pawnshops are at least 20 per cent cheaper than the brand-new ones on sale at jewellery stores. "There's negligible goods and services tax, no workmanship fee and the gold price per gram is lower," said Ms Yeah.

"The pre-owned jewellery are repolished so they look as good as new."

The shops' main business of pawnbroking may take a hit as lower prices put off those who want to pawn their gold, but Ms Yeah said the effect has not yet been significant.

Maxi-Cash senior brand manager Magdalene Eng said: "We have not seen much of a difference in the number of pawners. If they do need the money, they will still pawn their items."

Additional reporting by Lim Min Zhang