Gold prices are trading close to the mark of $5,200 an ounce, having surged over 75% over the last 12 months. Alukkas operates over 200 stores across the UAE, India and the US, with plans of expanding to Canada and New Zealand as well.
Alukkas has built up his inventory over decades, providing adequate cover against any sharp one-day price moves, as seen in the recent past. However, he has to replace inventory with new ones at higher prices, leading to an increase in working capital.”Working capital goes up, and every refill costs more,” Alukkas told Bloomberg. According to the Bloomberg Billionaires Index, he has a net worth of $5.8 billion.
There’s a new trend for clients to buy silver 10-gram and 50-gram bars as an investment, whereas previously Joyalukkas sold mostly decorative silver ornaments including anklets and hip chains, the billionaire jeweler said. He also added that the recent sharp surge in Gold prices has affected the purchasing power of the customer, making lightweight products the preferred choice.
Alukkas also said that he does not believe in the concept of hedging, even as bullion prices have been very volatile in the recent past. “We believe in the long run gold is going to be in one direction and we don’t believe in hedging,” he said.
