By Ruchika Tulshyan

Hindus believe that buying gold on Dhanteras will bring them wealth and good fortune for Diwali, their new year that falls three days later. But there has been little luck for Jackson Heights jewelry stores this year. The primarily south Asian neighborhood has more than 20 gold jewelry stores that usually run brisk business.

But gold jewelers in Jackson Heights faced a triple whammy to their business this year:  high gold prices coupled with a severe economic recession and a rainy day on Dhanteras, the auspicious day to buy gold.

Sales at Sri Krishna Jewelers at Dhanteras this year were the slowest in the 25-year-career of the store’s owner, Sunita (who declined to give her last name). Sunita, 46, estimates that business is down 50 to 60 percent from last year. A customer there who identified herself only as Shashi said that although she traditionally buys gold on Dhanteras, this year she struggled to part with her money due to the recession. “I originally decided not to buy gold until the prices came down, but something caught my eye. Besides I could really use the luck,” she added.

Mid-September to the end of October is typically the strongest time for gold-buying due to the Muslim festival of Eid and Hindu festivals of Navratri, Dhanteras and Diwali. But this year, demand for gold has been soft. Gold prices hit a record high of US$ 1,066.94 per ounce this month, up nearly 35 percent from one year ago.

The trade of gold on an international market means Jackson Heights’ gold vendors need not worry about customers looking for better deals in their South Asian home countries. “The stores in Delhi and Mumbai are far more lavish than what you see here,” said Sunita.

Their prices match what you get in the Western markets, and buyers the world over are exercising caution. Her store, Shri Krishna Jewelers, shines with a smorgasbord of earrings, necklaces and bangles.  But gone are the times when she had to commission new pieces every few days, as she did a mere two years ago. Now her gold orders are sent out on a weekly basis—if it’s been a good week.

“The dollar price of gold has gained 13 percent since the end of June, and Western gold jewelry demand has been hit hard as a result,” said Adrian Ash, Head of Research at BullionVault.com.

“We would get multiple orders of over $25,000 during wedding season when we opened our store four years ago,” said Poonam Gogna, owner of Mita Jewellers in Jackson Heights. “Now we’re lucky if we get one order worth that much.”

Today the average gold order for a South Asian wedding averages at $10,000 according to Gogna.  Her opulent store is one of the first in the long line of gold jewelry stores along 74^th street, and customers say Gogna boasts an impressive collection. But if things get worse she might have to move into a smaller shop, the 27-year-old entrepreneur said.

Nassim Hanif’s daughter is getting married next week. But her frown lines at the mention of gold are evident. She just left Kunal Jewelers after more than an hour of haggling down the price of a gold necklace for her daughter’s wedding trousseau. “We are braving the prices because it’s our only daughter’s wedding. But I am definitely buying less items than before and smaller pieces,” she said.

Just three years ago during the buoyant economy, Sunita said her customer base was strongly made up of married South Asian women for whom gold-buying was a hobby, but now everyone is carefully saving and looking for alternatives.

Pakistan-born Sobia Sattar, 23, has turned to costume jewelry in these expensive times. “It looks the same, and even though it does not have the same cultural significance as gold, we have to make do,” she said.

Walking around from store to store in Jackson Heights, many stores are chillingly empty.

“It’s a chain reaction,” said Sunita, referring to the effects of the recession. The luxury business has been one of the hardest hit, as gold prices have skyrocketed amidst a drop in consumer income. “Mass luxury products have lost their lustre. The overconsumption period; marketing-driven more than demand-driven, that has characterized the 90s and the first few years of the new millennium, is over,” stated Professor Luana Carcano, Professor of Luxury Management; Coordinator, Fashion & Luxury at the SDA Bocconi School of Management.

Once upon a time, gold jewelers could boast their sales in kilos, but now, Sunita said she can count the number of customers in her store at any given time on one hand. “I just don’t understand why the gold prices have been so volatile,” she said. “I have been in this business for 25 years, but this is the first time the high gold prices isn’t because of oil and isn’t because of currency.” Twisting the multiple rings on each gold-adorned finger nervously, she said that even wedding season, traditionally May-October for South Asians, was conspicuously quiet for her store.

Silver-buying and giving gifts in cash rather than the traditional method of gold-giving are two emergent trends as a result. “Parents are giving their children $10,000 to $15,000 in cash for weddings, because with the current price of gold, nothing they buy will even look like it’s worth that much,” she added.

None of the jewelers say they are worried about competition, however. “We are all facing the same thing—the crazy prices and the low demand,” Gogna said. Customers have a lot of choice in designs, but the prices remain consistently high. “It’s healthy competition because we’re all in it together,” she added.

Will things change this week, during the lead-up to Diwali on Saturday? Jewelers like Sunita and Gogna are praying for a miracle.