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A remarkable shift in consumers’ taste was noticed in bullion sales on the occasion of Dhanteras on Friday, with buyers skewed towards ornaments this year rather than investment products, including coins and bars earlier.
Despite a revival in consumer sentiment in the last one fortnight after three – four months of weakness, overall gold sales including jewellery, coins and bars, are likely to remain 15 per cent lower this year than last year. Interestingly, gold bullion (coins and bars) sales declined by a half as consumers stayed away from investment products. Jewellery sales, however, remained flat.
“We estimate bullion sales to decline by 50 per cent on shifting of consumers’ interest towards ornaments. Sentiment in jewellery sales remained robust, though,” said Haresh Soni, chairman of All India Gems & Jewellery Trade Federation.
Considering a third of gold demand goes for coins and bars, the decline of 50 per cent would mean overall demand to reduce by 15 per cent.
Gold sales were recorded at around 55 tonnes on Danterus last year which is estimated to decline to less than 50 tonnes this year.
A decline in gold price gave a fillip to the jewellery sales. Gold price declined by 4.70 per cent in the last one week to close at Rs 30510 per 10 grams on Friday, a decline of 0.55 per cent or Rs 170 from the previous day.
Manufacturing sector affected badly with non availability of gold in the last four months due to government’s restriction on imports. According to Soni, there was no shortage of bullion products.
“The shift in consumers’ taste is good as the government wanted to control gold import to bring the current account deficit under manageable level. At the same time, jewellery sales will promote domestic manufacturing which suffered in the last few months,” said Ashok Minawala, an industry veteran.
