Jewellery showrooms in Delhi-NCR saw a sudden surge in sales on Tuesday evening soon after the Prime Minister announced scraping of Rs. 500 and Rs. 1,000 currency notes from midnight. Though this led to a spike in gold rates, sales went down on Wednesday as jewellers stopped accepting currency notes that have ceased to be legal tenders.

As the news of demonetisation of Rs. 500 and Rs. 1,000 notes came in, large number of buyers thronged jewellery shops to dispose of cash and purchase gold. Many showrooms remained open even post midnight to cater to this unprecedented rush.

“Delhi witnessed record-breaking sales of gold coins and jewellery till late night on Tuesday. The rush was so huge that it was even better than the sales during Diwali. Everyone, it seems, wanted to convert their disposable cash into gold,” Vimal Kumar Goel, the president of Delhi Bullion Jewellers Welfare Association, told The Hindu . “Since Rs. 500 and Rs. 1,000 currency notes were legal tenders till Tuesday midnight, jewellers were accepting them to sell jewellery. However, no one is accepting these notes today and as a result, the sales have plummeted,” he added.

He said that the unprecedented demand for gold jewellery has led to a depletion of gold bullion stocks in the Capital. “Gold bullion stocks have almost gone out of the market. Bullion is still available through cheque payment, but for those trying to buying it in cash availability is a problem.”

“On Tuesday, buyers were present at jewellery showrooms till late in the night and some shops remained opened till 2 a.m.,” said Pawan Jalani of the Sadar Bazaar Jewellers Association. Mr. Jalani said that queues had formed outside jewellery showrooms with people waiting with cash for their turn to buy gold.

Mr. Jalani also said that sales have drastically come down on Wednesday after jewellers stopped accepting Rs. 500 and Rs. 1,000 notes. “Now no jeweller is accepting payment in Rs. 500 and Rs. 1,000 notes,” he said.

Mr. Jalani said though officially the rate of gold is touching almost Rs. 35,000 per 10 grams, it was actually being sold at an even higher rate.

“There was already a gap between demand and supply of gold due to the wedding season, but the overnight decision to ban Rs. 500 and Rs. 1,000 currency notes has shocked all including the jewellers. Now, people are afraid of inevitable price fluctuation of gold and precious stones,” said Pritesh Goyal, director and designer of SLG Jewellers Pvt. Ltd. “It wouldn’t be good if this sort of fear prevails for a long time,” Mr. Goyal said.