“Consumer sentiment has revived over the past week with a massive improvement in low to high end of jewellery. Customer turnouts are extremely good with more footfall turning into business opportunities,” said Rajiv Popley, director, Popley & Sons, a city-based gold jewellery producer and retailer with a large-scale sale in India and Dubai.
Pure gold surpassed the psychological barrier of Rs 30,000 per 10 g on Monday but retreated marginally to trade in a close range. Pure gold was trading at Rs 31,820 per 10 g on Friday and standard gold at Rs 31,760 per 10 g.
In global markets, however, the gold was trading at around $1,200 with a narrow movement. A falling rupee made prices higher in the Indian currency, with a 10 per cent duty on imports.
Over and above 3 per cent of goods and services tax (GST) on gold and 5 per cent on making charges have made gold costlier in India.
“The peculiarity of jewellery purchase in India is that consumers book the highest quantum of ornaments when gold price moves up. The case was no different this time. Jewellery sales surged with the sudden spurt in gold prices. This indicates that the ongoing festive season will see a rise in jewellery sales,” said Ashok Minawala, Director, All India Gems & Jewellery Trade Council (GJC).
Meanwhile, some jewellers are sceptical about continuation in the ongoing robust sentiment in jewellery sales.
“A surge in gold import during previous months indicates good jewellery buying sentiment this festive season,” said Surendra Mehta, National Secretary, India Bullion and Jewellers Association (IBJA).
Furthermore, to attract customers, many jewellers are offering freebies and fixed making charges of Rs 199 and 225 a gram now as against up to 15 per cent earlier.
Nitin Khandelwal, Chairman, GJC, believes that nothing can be said about rural sales during the ensuing wedding season.
“Farmers’ realisation remained lower this year due to subdued agri commodities’ prices. Many farmers did not get even the minimum support price (MSP) of their produce which impacted their income. Secondly, drought in nearly half of Maharashtra villages and water logging in some other states damaged kharif crop this year. Hence, rural sales depict a weak picture this year. However, rainfalls in immediate coming days might change the whole rural income dynamics. We may see ‘never ever’ festive season both ways. Sales might set an all-time high or low record this festive season,” said Khandelwal.
The festive season from Dussera till Dhanterus and Diwali gives a fairly long period for consumers to buy jewellery in anticipation of future prosperity. Silver demand also moved up in tandem with gold from both industrial and consumer sectors.
The Centre’s launch of sovereign gold bond with guaranteed periodic returns has also impacted bullion sales in India.