You’ve got to first find what you love, and then proceed to do what you love, believes C. Vinod Hayagriv, the chairman of the All India Gems and Jewellery Trade Federation (GJF) and managing director of a 140-year-old family business in jewellery in Bengaluru, C. Krishniah Chetty & Sons, which he absolutely loves being a part of.

A commerce graduate from St Joseph’s College, Bengaluru, and an alumni member of the Gemological Institute of America, Hayagriv’s ambition is to revolutionize the jewellery retail business in Bengaluru, India and South-East Asia and to popularise Indian jewellery around the globe.

As the chairman of GJF, Hayagriv is working towards removing unethical trade practices from the jewellery business.

Excerpts from an interview with Asian Age correspondent, Sangeetha Chengappa:

Do you think Dubai’s financial crisis will affect the Gold market?

The Dubai debt crisis will have no impact on the gold prices. We at GJF had predicted one year ago that gold trading in Dubai will become a problem because there is much more gold trading happening in India and China, compared to Dubai. The government has signed an agreement with Asean countries to allow the transit of gold through these Asean countries at zero duties from 2012.

In order to prevent China from taking over as the centre of gold trading in the world from Dubai, we have also requested the government to immediately consider allowing gold imports at zero duties. Importing scrap gold and setting up of refineries in India.

Where do you think gold prices are going? Will the price stabilise now that it hit Rs 18,000 per 10 gm?

The price of gold is $1,180 per ounce today (November 27). While I expect a correction in the gold price in the range of $30-$50 in the short term over the next seven to 10 days, I do not expect the gold price to fall below the $1,100 mark.

This is because, there is increased spend in infrastructure development activity all over the world, either in renewing existing infrastructure or building afresh. With capital expenditure increasing by the day, the amount of money required increases, for which currency has to be printed.

The currency printed has to be backed by something solid, which is internationally tradable, transferable and is universally recognised; and gold is the only commodity that fits the bill. In short, the gap that exists between the intrinsic value of gold and the value of money (currencies) in the world has to be bridged, either by an increase in the price of gold or by the quantity of Gold held by governments. That is why you see an increase in the price of gold.

How have Indian consumers reacted to rising gold prices?

There has been an overall reduction of around 30-35 per cent in gold consumption over the last 12 months. We saw a lull in sales in June, July and August 2009, when general confusion prevailed and consumers preferred to wait and watch for prices to stabilise and deferred purchases indefinitely. But, all that has changed now and consumers are back to jewellery stores buying only what they require most urgently, which is much less than what they bought earlier.

How has the rising price of gold impacted the jewellery business?

The value of gold, which has gone up by 35 per cent over the last few months, has more than made up for the overall fall in consumption. While the normal year-on-year growth in revenue for the jewellery trade hovers around five to seven per cent, it will be much higher this year, at 10-15 per cent compared to last year.

What would you advice our readers to do? Should they sell the gold they have and book a neat profit or should they invest more?

I would advice your readers not to sell but, to hold onto their gold. They should go ahead and buy as much gold as they need right now, without waiting indefinitely, expecting that prices will fall in the near future. Consumers should opt for a systematic investment plan (SIP) offered by most jewellery retailers, wherein, they commit to pay a fixed amount of money every month for 12-15 months.

For instance, consumers can pay as little as Rs 1,000 a month and the equivalent quantity of gold that Rs 1,000 can buy will be blocked for them at that day’s gold price and so on; at the end of 12-15 months the consumer will have the satisfaction of averaging his cost of gold through the entire period.

What are consumer preferences these days?

We are witnessing a marked shift in preference for diamond jewellery in the last few years and the trend seems to be on the rise over the last 12 months with consumption of diamonds posting a 25 per cent rise. There is also an increasing demand for light-weight gold jewellery.

The jeweller community is catering to consumer demand for light-weight, large looking jewellery, which hit the shelves this Diwali. While contemporary jewellery is in demand, the demand for traditional jewellery is much more sizeable and steady.

Courtesy: www.asianage.com

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