Gold sales fail to shine bright on Akshaya Tritiya

Sharp volatility in prices hits the consumer sentiment. Yellow metal rose Rs 85 per 10g from its previous close to settle at Rs 29,855 per 10g on Monday

Jewellery sales growth was somewhat tepid on the occasion of Akshaya Tritiya, one of the most auspicious occasions for buying gold.

Most organised retailers saw increased footfalls on Monday and estimated a 10-15 per cent increase in jewellery sales as compared to the occasion last year. They felt buying sentiment was weaker than expected, especially after the trade's 42-day strike against the new excise levy.

Also, the past two years have not been so good because of the restriction on gold import in 2014 and overall subdued sentiment last year around Akshaya Tritiya.

Ashok Minawala, Director, All India Gems and Jewellery Trade Federation, said the 10-15 per cent rise in jewellery sales was "similar to our expections”.

Sharp volatility in gold prices was another factor which hit consumer sentiment. It rose Rs 85 per 10g from its previous close to settle at Rs 29,855 per 10g on Monday.

“Sales growth is not comparable this year due to bad weather and also Akshaya Tritiya falling on a Monday, first day of the week. Gold prices are high but, otherwise, we are doing well,” said Sandeep Kulhalli, vice-president (marketing), Tanishq.

Compared to last year on the day, gold prices have risen 11 per cent. And, drought in many states hit the purchasing power of many.

“While footfalls are almost similar to last year, grammage of purchase was low due to high prices,” said R K Sharma, chief executive at Delhi-based PC Jewellers.

However, the buying behaviour of consumers is returning to normalcy after the anti-excise strike. Initial feedback from the trade is of an increase in demand. “Consumers have reconciled to the fact that the increase in gold prices in the past four months is not a blip and is here to stay,” said Somasundaram P R, the India managing director for the World Gold Council.

Vijay Jain, chief executive, ORRA, says: “We are finally seeing some green shoots on consumer spending. Expectations on the economy, business and job opportunities had run ahead of expectations. The consumer is now re-calibrating to this new reality and finally beginning to spend. This Akshaya Tritiya, we are expecting a higher growth than the previous year. However, we see diamond growth increasing and gold sales lagging.”