Old gold exchange transactions at jewellery stores have surged by as much as 60% year-on-year as soaring gold prices encourage consumers to use existing jewellery to fund fresh purchases, according to an ET report citing industry executives.The report said exchange-led purchases now account for almost half of sales at leading jewellery chains. The trend has gained momentum after the government raised the effective import duty on gold to 15% from 6% last month and Prime Minister Narendra Modi urged consumers to reduce non-essential gold purchases amid pressure on the rupee.Jewellers say the shift in buying behaviour is becoming increasingly visible across stores as customers seek ways to manage the impact of record gold prices.Joy Alukkas, chairman of jewellery retail chain Joyalukkas, told ET that gold exchange programmes now account for 65% of the company’s sales, up from 40-45% before the Prime Minister’s call to curb imports.“On some days, up to 70% of our business comes from old gold exchanges,” he said.Alukkas expects the share of exchange-led purchases to increase further amid elevated gold prices and economic uncertainty.The trend is also visible at Kalyan Jewellers. According to the ET report, exchange-led sales at the company have risen to nearly 40-45% from around 30%.“Following our gold exchange campaigns after the PM’s announcement,” executive director Ramesh Kalyanaraman said.The report noted that exchanging old jewellery has become an easier way for consumers to purchase new ornaments without committing large amounts of fresh cash. Prices of 24-carat gold stood at Rs 1,56,086 per 10 grams on Thursday, compared with Rs 99,961 a year ago.Industry executives believe the trend could also help reduce India’s reliance on imported gold by bringing household holdings back into circulation. India imports about 900-1,000 tonnes of gold annually, while Indian households are estimated to hold nearly 25,000 tonnes of the precious metal.“That reality is now beginning to reshape how organised jewellery retail approaches gold consumption strategies,” Surendra Mehta, national secretary of the India Bullion and Jewellers Association (IBJA), ET cited him as saying.He said gold exchange programmes are helping unlock household gold stocks instead of relying solely on fresh imports.The report added that Tanishq has also been aggressively promoting exchange schemes. Arun Narayan, chief executive of Titan’s jewellery division, told ET that around 4.4 lakh customers have exchanged 10 tonnes of gold over the past eight months.Consumer preferences are also evolving as buyers become more value-conscious. Many are opting for lighter-weight designs, modular bridal jewellery and products that offer both wearability and investment value.“Exchange transactions have remained steady, but they are largely driven by customers looking to upgrade existing jewellery rather than outright selling their gold,” Riva Dhir, Creative Director, Dhirsons Jewellers Dhiraj Dhir Group, Lajpat Nagar, told ET.The growing popularity of exchange programmes suggests that while record prices may be altering buying patterns, they are also encouraging consumers to monetise existing gold holdings rather than step away from jewellery purchases altogether, the report said.
