As gold prices hit consecutive highs, jewelers in Asia and the Middle East are facing their showcases losing their luster as customers rush to sell their old jewelry and coins.
If the rush to sell continues, it could ultimately lead to lower imports in major markets, which could moderate gold's rally, retailers and industry experts said.
Spot gold topped $3,000 an ounce for the first time on March 14, and continued to climb last week to take cumulative gains for the year to more than 15%, driven by a powerful combination of political and financial uncertainty.
The surprising rise follows a nearly 30% increase in 2024 and has spurred more business for scrap gold buyers often overlooked at Zaveri Bazaar, India's largest bullion market.
Textile trader Unmesh Patel said he had made a profit of more than 25% on the sale of four 10-gram gold coins bought less than seven months ago after the Indian government reduced import duties on the metal.
"I decided to sell rather than wait for prices to rise further," he said.
Domestic gold prices in India have risen by more than 32% since import tariffs were reduced in July, reaching an all-time high of 89,796 rupees per 10 grams.
"If prices remain this high all year, India's overall demand could fall by more than 30% by 2025," said Prithviraj Kothari, president of the Indian Bullion and Jewelers Association (IBJA).
"Buyers are finding it difficult to keep pace with rising prices, and their budgets are also not growing," he added.