Pink wads for gold: Rs 2,000 note withdrawal triggers panic buying | India News

NEW DELHI: On Saturday, a customer at a leading jewellery chain booked gold bangles for over Rs 5 lakh and paid in cash – in Rs 2,000 notes. The delivery of the items will take a few days. A day after RBI’s decision to suck out Rs 2,000 notes, which remain legal tender, jewellers witnessed a steady flow of customers buying gold with the Rs 2,000 notes.
The scene was the same at many stores, including prominent jewellery chains. Shop assistants were busy counting the notes on machines or by hand. “Subah se yeh pink note ne tehelka macha diya (This pink note has created havoc since morning),” said a salesman at a prominent retail chain in Noida.

Experts: Gold, furniture and consumer durables to see rise in demand
Customers said some jewellers were quoting a higher price for the yellow metal if it involved significant exchange of Rs 2,000 notes. But it would be a difficult task for consumers to use massive quantities of the Rs 2,000 notes to buy jewellery, without catching the attention of tax authorities, as all-high value transactions will need to have PAN card details.
The Reserve Bank of India (RBI) on Friday announced the withdrawal of the Rs 2,000 banknote from circulation with the public being “encouraged” to deposit or exchange the notes at bank branches until September 30, 2023. At the same time, the central bank maintained that these notes will continue to be legal tender even beyond the September 30 deadline.

“There is some knee-jerk reaction here. When cash is involved, one of the things you use it for is to buy gold. Definitely, it will push up demand for now and it may make up for the lost demand during Akshay Tritiya when prices reached a peak. It will be a gradual increase in demand as there is time to exchange notes,” said Gnansekharan Thiagrajan, director at Commtrendz Research. He also said jewellers have been adhering to norms since there is strict scrutiny in the sector.
Now, the tax department matches PAN data with income tax returns and tracks those who have concealed their income.
Experts said they expect the demand for gold, consumer durables, furniture, luxury items and travel to go up for now as people who have Rs 2,000 rupee notes would prefer to use them. “There will be a short-term increase in demand. It could also prompt people to go for forced saving in gold. But sectors like real estate could be affected,” said Rajesh Shukla, MD and CEO of PRICE, an economic thinktank.