Last year the lockdowns in response to the pandemic caused many people to become cash-strapped, especially the Indians forcing them to sell gold jewellery as a last resort.
A good example is Paul Fernandez, aged 50 years old, a waiter living in India. After losing his job on a cruise liner, he took out a loan using his gold Jewelry as collateral to pay for his kid’s education.
Now, life forces him to sell his gold Jewelry to pay for all his expenses after failing to find another job. Paul explained that a gold loan is like any other debt you take, and selling the Jewelry removes the obligation to his loan back with added interest.
Many Indians Use Selling Gold as Last Resort
As the pandemic keeps pushing millions of people into bankruptcy, people are left with one last resort. They sell their gold Jewelry to make ends meet.
You find this taking place throughout rural India, the country with the largest gold jewelry market. But with the virus, the impact on the economy and income is catastrophic.
There are fewer banks, and the only thing the rural areas can rely on is their gold in a time of need. The gold you can liquidate fast when needing instant cash to repay debt or pay for food and electricity.
Many people already had a financial problem in 2020 with the pandemic. Some people even got out of their debt by taking a gold loan instead of selling their Jewelry.
Signs of Distress for Loan Providers
Many loan consumers are stressing as loans turn sour as people cannot repay their loans. These include daily wage earners, farmers, to entrepreneurs.
Another fact is that in Southern India, about 25% of gold is sold to jewellers, higher than usual. But, still, even now, after lockdown worldwide, you see footfalls taking place for two reasons.
The first are people in need of the basics while others need to sell gold Jewelry for cash. India is an excellent example as they used to be a country buying a lot of gold in the past.
But the opposite is happening as the people are cutting down on gold purchases resulting from the virus outbreak and weak economy, trimming down their spending.
In 2020 the gold sales were at their lowest for the country. In contrast, this is only news related to Indians who love gold. The same is happening around the world.
More People Are Turning to Sell Their Gold
As the economy starts to splutter more people are turning to their gold Jewelry reserves to get them by.
What is there for you to do to help ends meet? The best way is to follow the same route as our Indian friends by selling gold Jewelry by visiting a gold buyer to get the best prices.
Doing this is a great way not to take out a loan leaving you repaying it with interest. So, what do you think?