“We have never seen such a fall in the last three decades,” was how Mr Prithviraj Kothari, President of Bombay Bullion Association, remarked about the continuous fall of gold and silver in the last couple of trading sessions.

Bullion prices have been dropping world over as investors flee to cash and dollar, seen as haven in a falling commodities market.

“Yes, it is a fall that we have hardly seen but the rise, too, was unhealthy. What gold and silver prices gained in the last 2-3 months has been lost in 2-3 days,” said Mr Sultan Mohideen, Secretary, Madras Jewellers and Diamond Merchants Association.

The volatile bullion market has resulted in buyers going on wait-and-watch mode.

“Beyond doubt, the trend is taking its toll on retail sales. It reflects on footfalls in stores,” says Mr N. Anantha Padmanabhan, Chairman, Gold Club of Chennai (a cartel of jewellery retailers in the city), and Managing Director of NAC Jewellery.

In Mumbai, too, sales were reported to be only in small quantities.

According to a couple of other retailers, stores have been experiencing 20-25 per cent drop in footfalls, and more in conversion.

Though gold and silver continued to dive, the precious metals pared losses by half at close amidst volatile trading in domestic, global and futures market. Silver, which dropped by over 10 per cent in Mumbai to Rs 48,740 a kg in the morning, recovered to close at Rs 51,825 (down 6.7 per cent or Rs 3,085). Pure gold, which shed five per cent in the morning, recouped to close at Rs 26,355 for 10 gm (down 2.3 per cent or Rs 640/gm), while 22-carat ornament gold ended at Rs 26,225 (down Rs 635 ). In the global market, spot gold dropped to an 11-week low of $1,534.49 an ounce before edging back to $1,598 in London PM fix. Spot silver dropped 16 per cent at one point to $26.04. It, however, rebounded to $28.16.

Mr Mohideen said the real buying starts later and buyers will wait for a few days before making any purchase.

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