The big expectation of gold demand on the occasion of Akshaya Tritiya did not materialise on Monday. Gold buying was down nearly 20-40 per cent compared to last year as the prices are quite high and the economic downturn has restricted spending on gold, said jewellers. In the Mumbai market, standard gold closed Rs 135 higher at Rs 14,830 for 10 gm.
Akshaya Tritiya, one of India’s two biggest gold-buying festivals, is the pinnacle of sales in the first half of the year, and offers pointers to full-year demand.
Mumbai has seen lower sales while there was some demand in cities such as Ahmedabad and Rajkot. But most of the demand was for replacement. However, the Delhi market saw some spurt in demand and prices which surged by Rs 140 per 10 gm to regain the Rs 15,000-mark after a month. South Indian cities followed Mumbai with lower demand.
“People are coming to buy jewellery but mostly their demand is for replacing old jewellery and not for fresh buying. High price is the big dampener causing low demand. Buyers are waiting for prices to fall,” said Pritesh Mutt, production head of D G Jewels, in Mumbai.
The word “Akshaya” means imperishable or eternal. Initiations made or valuables bought on this day are considered to bring success or good fortune. Buying gold is a popular activity on Akshaya Tritiya, as it is the ultimate symbol of wealth and prosperity. But people have either no money or no courage to buy gold at these high prices.
“There is no buying in wholesale market but in retail there is buying related to Akshaya Tritiya,” said Suresh Hundiya, president of the Bombay Bullion Association. On imports, he said, “India’s gold import is likely to be about 15-20 tonnes in April.”
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Manoj Soni of A B Jewels, Ahmedabad, said, “Compared to last year, the Akshaya Tritiya demand this year is quite good.” According to him, on Monday Gujarat would sale 400 kg gold.
“High prices have confined buying to light-weight jewellery, which is the prime choice of buyers now. But on Monday demand was good compared to normal days,” said Balavantbhai Badani, president, Rajkot Gold Dealers Association.
“This year is more difficult than last year,” said T K Chandiran, managing director of KTM Jewellery, in Coimbatore. “Sales could be only about 60-70 per cent of last year,” he added.
Demand has already been very weak in 2009, with imports at 2.7 tonnes for January to March, down 96 per cent from a year earlier, According to data from the Bombay Bullion Association.
“They have a religious belief, so they are buying, but the quantity is less,” said Jitendra Vummidi, partner with Vummidi Bangaru Jewellers in Chennai.
A dealer with a large state-run trading company that imports gold and sells in the wholesale market said that sales were down 20 per cent this month from a year earlier, showing jewellers bought less to prepare items for selling on the festival day.
In 2008, gold sales for Akshaya Tritiya were 48.99 tonnes, down 11 per cent from 2007, according to the World Gold Council. “The villain is the price,” said Daman Prakash, member of Tamil Nadu Bullion Forum, who also said sales were likely to be down substantially over the year.
S Ramakrishnan, head of retail liabilities product group at HDFC Bank, expected sales of gold coins to be flat on year on a per-branch basis, with sales at new branches to help push up the bank’s overall sales volumes.