True, an unprecendent rise in prices of precious metals like gold may dissuade a section of potential buyers, but jewellers and bullion traders are looking forward to handsome sales with the onset of the festive season on Friday.
The ‘season’, which features festivals like Durga Puja, Dussehra and Diwali besides marriage, is customarily bonanza time for bullion traders. A shopping spree it entails usually persists till Christmas and New Year.
Of late, gold prices have been witnessing fluctuations and hovering above Rs 26,000 per 10 gm. Yet, the traders are hopeful of a large turnover.
“We are looking forward to good demand this time too. The gold rate is rather stable now,” says Gitanjali Jewellery Retail managing director Santosh Srivastava. “For people, who generally tend to hold back purchases during fluctuations, the wait for a stable price regime has virtually ended.”
The Indian jewellery market comprising gold and silver jewellery/bars/coins and diamond account for almost Rs 1,50,000 crore annually. It is growing by 6-7 per cent. This does not include commodities trading in precious metals, which is transacted over bourses in dematerialised form.
The Gitanjali Group plans to open about 50 multi-brand, multi-category lifestyle stores under the JewelSouk brand this fiscal. They aim to showcase all its major jewellery brands under one-roof. “The retail investor still considers gold as an important asset class along with equities,” said Srivastava. “This trend is growing.”
The first of this new format was on Friday launched at the international terminal of the Mumbai airport. From there, it will subsequently be extended to other lifestyle and luxury department stores emerging in the metros and tier-2 cities. It will also be opened as shop-in-shop at Wal-Mart, Centrals, Spencers, Star Bazaar, Kapsons and leading standalone departmental stores.
The organised segment accounts for less than 15 per cent of this market, while a chunk is accounted for by the unorganised segment characterised by small and neighbourhood jewellery outlets.
The Uttar Pradesh bullion association said the demand for jewellery would “only rise” in the festival season. “We expect it to rise 25-30 per cent above last year’s,” according to its functionary Shiv Narain Agarwal, who is a leading Lucknow-based jeweller.
He predicted that gold would touch Rs 30,000 per 10 gm by December and that silver prices too would experience a steep price rise.
On Friday, the bullion industry is pressing hard for mandatory hallmarking of jewellery as a guarantee of purity. Pointed out Gitanjali’s Srivastava: “The organised segment is growing fast at the rate of 25 per cent year-on-year. In the next 7-8 years, it would account for almost 30 per cent of the domestic market.”
