Gold sales hit a high on Akshaya Tritiya

Despite high prices, customers turn out in impressive numbers overall sales rise 10-15%

Indian consumers’ perennial appetite for gold pushed up sales of the yellow metal by 10 to 15 per cent on Akshaya Tritiya — considered the most auspicious occasion for buying the yellow metal — despite a spurt in prices.

Data compiled by the apex trade body, All Indian Gems & Jewellery Trade Federation (GJF), show gold sales averaged between 40 and 42 tonnes in the past three years, after a record 55 tonnes witnessed on this day in 2008. According to industry estimates, gold sales on Akshaya Tritiya this year is around 17 tonnes, up from 15 tonnes last year.

“Consumers lowered the quantity of purchase so as not to increase their investment budget due to the sudden rise in prices. But their enthusiasm continued despite higher prices and led to more than 10 per cent rise in overall sales,” said Lalit Jagawat, proprietor of Nakoda Bullion and director, the Bombay Bullion Association.

At Rs 28,885 per 10 gm, gold was up 32.4 per cent on Tuesday in Mumbai from Rs 21,815 per 10 gm last Akshaya Tritiya (May 6). In the last fortnight, however, the price of the metal has risen from the level of Rs 28,120 per 10 gm. Silver, however, jumped a marginal 4.5 per cent to close at Rs 56,750 a kg as against Rs 54,305 a kg in the previous year.

Gold continued to offer the highest returns among other competing asset classes, despite being an avenue of inflation hedge.

Surprisingly, consumers have seen a change in buying sentiment this Akshaya Tritiya. From being skewed towards coins and bars, most shifted their preferences towards jewellery, as they feel branded and hallmarked ornaments can be converted into cash at any time, adjusted for the component of making charges.

Bangalore–based Rajesh Exports witnessed extraordinary response from consumers on this occasion. While sales in value terms has risen by 110 per cent, in volume terms it surged 65-70 per cent, which Managing Director Rajesh Mehta attributed to increased presence across the country.

According to him, the company had 51 showrooms across Karnataka until Akshaya Tritiya last year, which was expanded to 82 showrooms (78 in Karnataka and four outside) this year. Jewellery comprises around 70 per cent of the company’s sales. The remaining 30 per cent is shared by investment products like coins and bars.