Jewellers across are breathing freely as the four-month-long wedding season has revived the gold demand. Due to a slowdown in the economy, there had been little buying during Diwali and all hopes had been pinned on the marriage season to lift up the demand.
However, jewellery exports, down by nearly 30 per cent following the September 11 terrorist attacks on the USA, are yet to bounce back, traders say.
G S Pillai, manager north of the World Gold Council, told Business Standard: "The wedding season will definitely boost demand for gold jewellery which forms an essential part of the dowry gifts in India."
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The wedding season first peaks in the first half of December. After a one-month pause, weddings resume in mid-January, increase in February and March, and again peak in April-May.
The purchasing power of farmers has improved following good June-September rains over most parts of the country, yielding a bountiful winter harvest.
"It will surely increase the bullion demand from rural areas," said Rajiv Jain, a bullion trader.
According to WGC, gold demand in India rose to 490.4 tonne in the first half of 2001 from 417.8 tonne during the same period the previous year.
However, the demand fell by 17 per cent in the third quarter of this year. It was mainly due to the one-and-half-month-long 'adhak mas' around October, which is considered 'inauspicious' for purchasing gold. The 'adhak mas' occurs once in three years.
Deepak Mehra of the Delhi-based Mehrasons' Jewellers said: "The demand revival has come as a big relief to the trade since Diwali buying consisted mainly of small purchases like chains, pendants and rings. Even now, a major part of the traditional heavy jewellery is being purchased by the Indians abroad."
"Gold jewellery exports have gone down by around 30 per cent as many people have shifted to purchasing commodities other than gold for their Christmas gifts," Jain said.