Mall boom to fuel yellow metal sales in India

World Gold Council, the global apex body of miners, expects sales of the yellow metal to get a major fillip this year through major retail malls coming up across India, Dharmesh Sodah, director, World Gold Council, said.

"Gold sales are expected to reach a new level with a lot of activity happening in the retail sector, where major players are ready to make an entry in a big way," Sodah said.

He said, the council has initiated talks with the Tata group and Pantaloon, among others, and is finalising strategies with a few others to merchandise gold jewellery at malls throughout the country.

Sodah said the council believes that the traditional system of retailing gold through jewellers needs to evolve in order to attract the young generation towards the yellow metal.

"There is ample opportunity in shopping malls for the display of gold jewellery compared with traditional jewellers' shops," he said.

Moreover, youngsters frequent malls more often, he said. According to Sodah, 50 million square feet of space is currently being developed as retail shopping malls across the country.

Sodah said to increase the lure of the yellow metal for the young brigade, the council has decided to focus on branded gold jewellery. He said gold sales for the occasion of marriage still comprises 50 per cent of annual sales, while 70 per cent annual sales are linked to marriages.

"Around 8 million marriages that happen in the country every year are the mainstay of gold sales, but we have to look for other avenues. And shopping malls could play a major role (in boosting gold sales)," Sodah said.

He said gold is getting stiff competition from mobiles, automobiles and various other luxury items, which are now seen as fashionable items to possess.

"Time has come when gold should be projected as a desirable object among youngsters," Sodah said.

Sodah said gold exchange traded funds will be the next big thing in gold sales in the country in 2007. At present, up to 5 per cent premium is charged over the price of gold in any form. But gold ETFs will drastically reduce the same and gold would be traded on actual value.

"ETFs allow buyers and sellers the flexibility to store gold without buying insurance," he said. "Gold ETFs will be launched by March-April this year, which will change the way gold is sold and bought in India," Sodah said, adding that UTI Mutual Fund, Benchmark Mutual Fund and Kotak Mutual Fund have already filed offer documents with the capital markets regulator, the Securities and Exchange Board of India.