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Dhanteras sales jump 20% over lower gold, silver prices

Average gold prices that were around Rs 32,500 per 10 grams last Diwali, were hovering at Rs 27,500 this year

BS Reporters  |  Ahmedabad/Rajkot/Mumbai 

The occasion of Dhanteras on Tuesday, when it is considered auspicious to buy gold or silver, saw a jump in sales of jewellery over the country by at least 20 per cent over last year’s day, in the wake of lower prices in the retail Average gold prices were around Rs 32,500 per 10g during Diwali last year. They’re now Rs 27,500 per 10g. Silver is now around Rs 39,000 a kg, compared to Rs 49,000 a kg last year. Last Diwali however gold prices being too high, demand was at its low. Hence this year’s increase in demand on auspicious days like Dhanteras is high in context of low base. However traders are confident of buying coming in jewellery as over all sentiment has improved with prices being low. The Ahmedabad Jewellers’ Association (AJA) had launched a Swarna Utsav shopping festival which concludes on Diwali (Thursday), with the aim of making up for losses in the past six months due to lack of business. “We expect sales to rise by 15-20 per cent this year over last season,” said Shantibhai Patel of the AJA. “We expect sales of Rs 250-300 crore this season.” Adding: “Compared to last year, more people are going for gold coins and lightweight jewellery. This is also because the marriage season is a little late this year.” Rajkot Gold Dealers’ Association president Bhayabhai Sholiya said they, too, expected 15-20 per cent higher sales than last year’s Diwali season. “Since the last one month, the sale have picked up significantly, mainly due to lower prices of gold and silver compared to last year. People are also preferring traditional jewellers against branded jewellery,” he said. Jewellery sales jumped by at least 30 per cent on Tuesday at Mumbai’s Zaveri Bazaar. “Buyers were encouraged with stable gold prices. With the wedding season ensuing in the third week of November, consumers bought even wedding sets, coins and bars. The ongoing positive business sentiment, along with lower commodities prices, helped the bullish sentiment.

We estimate at least 30 per cent growth in sales today,” said Kumar Jain, managing director, Kumar Jain, Umedmal Tilokchand Zaveri. The attraction of traditional jewellery remains but lightweight and intrinsic design ornaments were primary flavours for consumers. “The entire retail sector witnessed a slowdown between April and September. A positive sentiment set in Dussehra onwards. We estimate a decent sale across all sectors – gold, platinum and diamond jewellery — but gold remained a preferred choice of consumers. Urban consumers were extra bullish but sales growth from rural India was comparatively lower. We are estimating around 35 per cent growth in sales this Dhanteras, which sets the mood of the rest of the festive and wedding season,” said Vijay Jain, chief executive for the ORRA brand of jewellery. Consumer sentiment was upbeat in Delhi as well. P C Jeweller’s chief executive, R K Sharma, expects bumper jewellery sales this festive season.

"The gold demand this Diwali mirrors the general optimism that has set in the economy, reinforcing the traditional faith in gold for the average household saver and the increased economic relevance of this asset class due to various uncertainties on the horizon. Policy restrictions have had little impact on demand for gold, though sources of supply have increasingly shifted to unauthorised channels. It is time for a long term approach to gold in India. As a nation we need to focus on measures that will unlock the potentially transformative value of the gold stored in millions of private households in order to fund the nation's growth." Somasundaram PR, Managing Director, India, World Gold Council.

First Published: Tue, October 21 2014. 22:33 IST