Gold price correction to lift Dhanteras sentiment but sales volumes likely to remain flat Jewellers

Mumbai, Nov 4 (PTI) Jewellers are optimistic about sales this Dhanteras, with a significant correction in gold prices lifting consumer sentiment and driving demand for lightweight jewellery and small-ticket purchases, even as sales volumes are expected to remain largely flat year-on-year.

     The decline in gold prices is expected to boost demand this Dhanteras, All India Gem and Jewellery Domestic Council (GJC) Chairman Rajesh Rokde told PTI.

     Dhanteras, which is considered an auspicious day for gold and silver purchases, is at the beginning of the month this year, on November 6, when consumers are likely to have their salaries in hand, thereby encouraging spending, he noted.

     While firm gold prices encourage a shift towards lightweight designs, silver jewellery and coins are also gaining traction.

     "However, high inflation, driven by geopolitical tensions, and the drought-like situation in Maharashtra could weigh on consumer sentiment. We are expecting flat growth in terms of volume compared to last year.

     "In value terms, sales are likely to grow by 20-30 per cent," Rokde said.

     He added that bullion purchases are generally funded through savings, and, therefore, the impact of inflation is expected to be relatively limited this festive season.

     Retailers, meanwhile, are rolling out various offers and schemes to woo consumers.

     Gold prices were at around Rs 1.10 lakh per 10 grams during the corresponding period last year.

     Prices have declined 12 per cent over the last few months. The yellow metal's price fell 12.8 per cent, or Rs 20,900, to Rs 1.42 lakh per 10 grams on October 31 from Rs 1,62,900 on May 29.

     The precious metal was trading at Rs 1,46,600 per 10 grams on Wednesday, up by Rs 4,800 from preceding session's closing level.

     Regarding silver, Rokde said the metal continues to attract younger consumers because it is more affordable and offers a wider variety of jewellery options to complement different outfits.

     Demand, however, is expected to remain flat in volume terms compared to last year. In terms of value, sales are projected to grow by around 30 per cent.

     World Gold Council Regional CEO, India, Sachin Jain, said the significant correction in gold prices has helped stimulate jewellery demand.

     "I believe we're likely to see a combination of factors driving this momentum. Consumers planning weddings over the next three to six months may choose to advance their purchases, given the attractive price levels. As a result, I expect demand to be strong across categories, from high-value, premium jewellery pieces to investment-oriented purchases such as gold coins and bars. Overall, I believe we will see healthy traction across the jewellery segment," he added.

     GJC Vice Chairman Avinash Gupta said the decline in gold and silver prices has boosted consumer sentiment across the country, and jewellers expect demand to grow by 15-20 per cent in value terms this season.

     "However, in volume terms, demand is likely to remain at the same level as last year. The market had witnessed a slowdown over the past six months amid rising gold and silver prices, coupled with the Prime Minister's appeal to citizens to refrain from purchasing gold," he stated.

     Lightweight jewellery is expected to see stronger traction this season, with even wedding jewellery witnessing a shift towards 18-karat gold, he said.

     In the silver segment, the industry anticipates a 10 per cent year-on-year increase in volume following a nearly 50 per cent correction in prices, he said.

     "Gold and silver are likely to complement each other this season, with consumers purchasing both for weddings and investment purposes. We are seeing a trend where consumers opt for gold jewellery for the main wedding ceremony, while choosing silver jewellery and articles for the other wedding rituals," he added.

     Senco Gold Ltd MD and CEO Suvankar Sen said "We remain positive about achieving growth of over 20 per cent this festive season compared with last year. With gold prices correcting by 8-10 per cent, buyers are becoming more experimental in their choices, exploring newer designs and different caratages while prioritising quality, value and versatility."

     The company is also seeing encouraging trends in diamonds, with growth of over 25-30 per cent, Sen added.

     Kama Jewelry founder and Managing Director Colin Shah said the softening of gold prices has brought a timely cheer to Indian consumers, especially as the peak of the Indian festive season is around the corner.

     "Facing elevated baseline rates, demand has pivoted towards lightweight studded jewellery based in 9K to 19K range. This shift has also driven parallel demand for both lab-grown and natural diamonds, centred on ticket sizes between Rs 1.5 lakh and Rs 3 lakh. Overall, while value-wise demand may remain similar to last year, we may see a slight decline in volume-wise sales of about 10 per cent, given the price rise driven by the Rupee/USD rate and its impact on gold prices in rupee terms," he added.

(This story has not been edited by THE WEEK and is auto-generated from PTI)