Digital platforms strike gold on Akshaya Tritiya amid lockdown

Many Indians had relied on apps such as Paytm Gold, Mobikwik or Google Pay to buy gold on the auspicious day, as jewellery shops remained shut due to MHA guidelines

Fifty-eight-year-old Chandrasekar has been buying gold on every Akshaya Tritiya for the past several years. And this year especially, the Chennai resident did not want to break the tradition as he wanted to buy it for his daughter's wedding, which is scheduled in a few months. Unlike the previous years, however, Chandrasekar did not buy from a jewellery store, and used a digital payments app to make his purchase insteas.

"Though the quantity wasn't significant, the purchase was made only for the sake of auspiciousness associated with the festival," Chandrasekar said.

Many Indians had relied on apps such as Paytm Gold, Mobikwik or Google Pay to buy gold on the auspicious day, as jewellery shops remained shut due to the guidelines issued by the Ministry of Home Affairs. As a result, there was a surge in volumes on these platforms, industry sources said.

Paytm Gold, for example, said that the platform had a four-fold increase in value on the festival day last Sunday over the year's sales, with tier-II and smaller cities contributing to 60 per cent of the orders. "Paytm sold the highest amount of MMTC-PAMP Gold among all digital platforms in the country," a company spokesperson said.

MMTC-PAMP is a joint venture between state-owned MMTC and the Switzerland-based bullion brand. It is a refiner that has tied up with digital platforms such as Google Pay, Phone Pe, Motilal Oswal and Fisdom for sale of gold and also provides secure vault services for its storage. Google Pay did not disclose the figures citing silent period ahead of its earnings next week.

It is considered auspicious to purchase gold, silver ornaments or a new property during the occasion of Akshaya Tritiya or Akha Teej for Hindus and Jains that signifies never diminishing prosperity. It is the most important day of the year for jewellery shops and brands in terms of business, especially in South India.

"During Akshaya Tritiya weekend, gold purchases value hit the level which we usually do in a month on an average," said SV Subramanya, CEO and co-founder, Fisdom, a mutual fund investment app. "Also, at a time when equity markets is not doing well and the real-estate market is facing a downturn, with gold prices outperforming as an asset class in the last 3-6 months is another reason for the uptick."

The PayU-backed startup has seen an uptick in gold-based mutual funds during the festive season. "Usually we see less than 10 transactions a month for gold-mutual funds as it is not as popular as physical gold but it now ran into a few hundreds during the weekend."

Gold prices touched fresh highs of around Rs 47,300 per 10 gram (MCX gold price) during mid-April in India. But the precious metal erased some of the gains as the easing of lockdown restrictions in various countries has boosted risk appetite in the market and resulted in some profit booking in the short term, said Sugandha Sachdeva, Vice President (commodity and currency research), Religare Broking Ltd. The yellow metal advanced 47 per cent compared to last Akshaya Tritiya.

"However, from a medium-term perspective, we are fairly positive on gold prices due to an array of supportive factors—central banks pumping in liquidity, turbulent times in risk assets and oil prices, low-interest-rate environment and strong investment demand, all of these would keep gold in demand," Sachdeva said. 

One should park at least 10-15 per cent of their portfolio in gold in a phased manner on some declines. The prices may end the current calendar year around Rs 52,000 per 10 grams, she added.