By Rajesh Bhayani
This year’s Akshaya Tritiya witnessed a rise in low-weight gold jewellery sales as consumers cut down on spending due to the high price of the precious metal. The price of gold, currently hovering around Rs 60,000 per 10 gram (24K), is roughly 18% higher than last year’s Akshaya Tritiya. This helped branded jewellers match average sales value to last year’s, despite volumes being around 20% lower.
He said gold demand on this festival should not be considered a benchmark. “Jewellers have been telling us that consumers are gradually accepting the fact that high prices are here to stay and may go up further. As a result, gold demand will only increase in the next weeks and months,” he said.
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Because of the washed-out pandemic years, gold demand on this day was comparatively higher last year, and was in line with the long-term average Akshaya Tritiya gold demand.
Debajit Saha, lead analyst, precious metals, LSEG said: “For the last two months, gold prices have been higher and consumers were waiting for a fall in prices to buy gold. Since that fall has not happened, that pent-up demand came yesterday, it being an auspicious day. As a result, jewellers, particularly branded ones, experienced a return of clients to stores.”
An official of a big retail jewellery chain, on the condition of anonymity, said: “We have seen more buying in low-weight jewellery in the 2 to 20-gram segment. In the coins segment, demand for 1 to 5-gram coins was higher.”
Even in Gujarat, a major gold and silver market, customers preferred low-weight jewellery and booked gold for weddings.
“We have observed that customers are gravitating towards smaller jewellery items, and many are returning to finalise their purchases on Akshay Tritiya,” said Shrey Mehta, director, Pooja Diamonds (Gujarat). “While rising gold prices may have had an impact on sales, we have found that customers are increasingly perceiving gold as a safe asset to invest in, which has helped preserve consumer trust and demand for gold products,” he added.
He said while there were fewer purchases overall this year, the total amount spent is essentially the same as last year. When gold prices increase, customers’ budgets for weddings stay the same, which has an impact on the amount of gold they purchase.
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Cash market plays spoilspot
Market players have been upset over higher demand off the books. This is because smuggled gold was selling at a discount of $10 per 10 gram, and at a high price there is a sizeable benefit to buy in cash. Because of 15% duty on gold, since last July 100 tonne of the yellow metal is estimated to have entered the country. This is being sold at a heavy discount to the landed cost of import. As a result in the last few months, especially in the March quarter, official imports were down. This was reflected in gold sales of all branded jewellers and retail chains on Akshaya Tritiya too.