It has been a double whammy for gold merchants in Kerala - which according to the National Sample Survey Office (NSSO) survey is the biggest consumer of yellow metal in the country - with sales plummeting six-seven per cent compared to the year-ago period. The trigger - skyrocketing prices and economic downturn.

A representative of a major jewellery firm said there has been a 20-25 per cent decline in sales this year. “Gold prices have touched a record high, with a gram costing Rs 3,540. "They are likely to go up further. The sudden hike of Rs 30-40 in the price in a day, unlike the Rs 10-20 earlier, indeed is of grave concern. Consequently, overall sales have been hit,” said B Girirajan, All Kerala Gold and Silver Merchants’ Association president.

The decline in bullion sale is a pan-India phenomenon, with a 70 per cent slump in sales reported countrywide. “We are now seeing a trend where customers buy gold only days before the wedding date owing to the high price,” said Girirajan. According to a jewellery firm’s representative, “Even occasional buyers now visit jewellers either to redeem gold deposit schemes or to replace scrap jewellery with new ornaments and pay the small differential. Though it is boom time for jewellery firms since it is the wedding season, the drastic slowdown has affected the market”.