The gold prices are widely fluctuating since last two months. Gold prices in the first week of Jan were around Rs20500 per 10 grams for 24 carat gold. (Prices as per moneycontrol.com). I went to buy a 24 carat swiss gold bar of 10 grams at a jeweller in Dombivli. I enquired about the prices at several places. All of them quoted around Rs20900 for the said 10 gram bar.
On 24th January, the prices dipped sharply to Rs 19800 (Prices as per moneycontrol.com) per 10 gram. I once again went to buy a gold bar intending to benefit from the above price dip and hence checked the prices with a few jewellers. To my surprise, despite a dip of Rs 700 per 10 grams, the jewellers quoted the same price of Rs20900 per 10 gram, quoting urealistic reasons and saying this is the lowered price and this is the lowest price they can afford to give.
On the other hand, if the prices shoot up, and I try to sell off my gold bar to them, they offer almost 700 to 800 less than the price appearing on moneycontrol.com. Thus they make a sum of almost 1600-1800 per 10 Grams which is clearly an unfair trade practice.
I would like to know the reason for the above. Even when there are wide fluctuations in the gold prices in market, retailers refuse to offer gold at the revised lower prices but are always ready to increase the prices if the marker price goes up. Is there any mechanism to curb this utterly unfair trade practice?