Sales expected to pick up during ‘Akshaya Tritiya’
The steady rise in gold prices may have had a part to play in consumers staying away from the yellow metal but with the Akshaya Tritiya festival weeks away, retailers are cautiously optimistic that sales will improve.
With prices hovering around Rs 17,000 for 10 gm, jewellers believe large sales, in terms of volume, are unlikely. So, even as the value of gold changing hands may come down, it is hoped that consumers will continue to use the precious metal as an investment option.“We are having difficulties, but there is confidence that the (gold) prices will sustain. Since quality control has been put in place, customers are assured of the return value. The quantity may reduce but I am confident of good sales,” said Samar De, a retailer and wholesaler of gold jewellery.
The World Gold Council (WGC), too, remains positive about demand for gold in the upcoming festive season on the back of firm prices that have bolstered consumer confidence.
“Investment sentiments in gold have always been strong, especially in our country, since consumer and investors recognise it as a time-tested safe asset class and currently it is one of the best performing asset classes. At a global level also, since the 2008 economic turmoil, investor confidence in gold as an asset class has increased to a great extent and it continues to do so,” said WGC Middle East and India managing director, Ajay Mitra.
Despite rising prices, some jewellers feel volumetric increase in gold sales can be expected over the next few weeks. “The outlook is good. While gold prices have remained steady, the disposable income has also increased. Sales could increase by 15-20 per cent, in volume terms this Akshaya Tritiya, compared to the last year,” said All India Gems and Jewellery Trade Federation vice chairman, Bachraj Bamalwa.
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At the same time, though, studded jewellery may well be the preferred purchase. “The gold buyer is slowing moving to white goods due to higher prices of the metal. For a certain sum of money, the quantity of gold that one can now buy has drastically decreased compared to a few years ago. As a result, some consumers are preferring to move on to other jewellery, including diamonds,” said Gems and Jewellery Export Promotion Council regional chairman, Pankaj Parekh.
Parekh claims that in the past few years, the move towards studded jewellery has been robust. “Diamond jewellery, for instance, has grown by about 25 per cent year-on-year. But, this has come at the cost of gold jewellery,” he adds.
Last year, spiralling gold prices had even led jewellers to contemplate reducing the cartage of gold used for studded jewellery, with an eye on keeping their offerings within the reach of the average Indian buyer.