Fallout from the Ukraine crisis: How weddings in Kashmir are most affected

Srinagar: Ghulam Nabi Bhat was happy that his daughter tied the nuptial knot. The family was busy shopping as the big day approached.

At the start of the Ukrainian war, gold prices skyrocketed, upsetting Bhat’s budget. “The price of gold has increased enormously. It becomes unaffordable. We are waiting for prices to come down,” Bhat said.

Like Bhat, dozens of people delayed purchases citing rising prices.

New sanctions against Russia have pushed up the price of gold on the international market. Russia is the world’s third largest producer of gold after Australia and China. Thus, these sanctions of Western countries against Russia should strengthen the world supply.

“Just a week ago, a gram of 22 karat gold was sold at Rs 4300 per tola. Because of the war between Ukraine and Russia, the price rose to Rs 4600 per gram. We don’t know if the rates will go down or up further,” said Bashir Ahmad Rather, president of the All Kashmir Gold Dealers and Workers Association.

Gold is generally considered a hedge against inflation. Also, in times of war when the stock market has become volatile and risky, investors redirect part of their investments to gold, considered a safe bet.

Gold traders in Kashmir told the Kashmir Monitor that the price hike had affected their trade by almost 90%. “We don’t have any customers right now. All gold traders and workers have been idle for over a week now,” he said.

Jewelers think buyers will wait and watch before they start buying gold. “Customers will wait for the price of gold to drop. Already the lockdown has affected people’s ability to buy in general and our business in particular. We hope there will be no more wars so that everyone does not suffer,” he said.

The jewelers said people who have reserved gold in advance will not be affected. “People who have placed orders in advance will have no problem. They have already paid part of the sum according to the previous rates,” said Shakeel Ahmad, a jeweler.

In the past too, conflicts have led to volatility in stocks and gold. This happened during Iraq’s invasion of Kuwait in 1990. After the September 11 attacks, the price of gold also peaked.

Edward N. Arrington