Diwali 2022: Jewellers cautiously optimistic this Dhanteras; expect business at par with last year level

Mumbai: With the Dhanteras around the corner, the jewellery industry is cautiously optimistic about the demand, mainly due to the exceptionally high base last year, inflation worries and the overall rising cost of living. The industry is cautious despite benign gold prices, which are ruling at around Rs 47,000-49,000 per 10 grams, and overall positive consumer sentiment. After the first wave of the pandemic, revenge purchases along with postponed weddings boosted demand, resulting in an exceptionally good Dhanteras in 2021, with sales crossing even the pre-pandemic levels. Dhanteras, which marks the first day of Diwali in India, is considered auspicious to buy gold and silver as part of Hindu festivities. “The demand for jewellery during Dhanteras is likely to be at par with last year as 2021 was an exceptional year for the industry when the country slowly inched towards normalcy after the pandemic. “Postponed weddings and revenge purchases last year boosted demand with sales crossing the pre-pandemic levels,” All India Gem And Jewellery Domestic Council chairman Ashish Pethe told PTI. This year, the consumer sentiment is dampened following high inflation, rising costs and unseasonal rains affecting agriculture activities, he said. “Even the pre-booking of jewellery, which usually begins during Dussehra, is very slow this year. However, the weak gold price is likely to favour the sector,” he added. World Gold Council Regional CEO, India, Somasundaram PR said that over the years, India has developed a strong cultural bond between gold and auspicious festivals, such as Dhanteras, supported by sound economic reasoning. “The purchase of gold as a token boosts the positivity surrounding these festivals. Moreover, with recent corrections in local gold prices and a favourable monsoon, festive sentiment among retail consumers appears to be positive,” he pointed out. However, the impact of inflation on household finances may lead to an immediate impact on gold jewellery demand, he cautioned. “Unlike the Diwali season of 2021, this season may not have the advantage of pent-up demand or savings from muted wedding celebrations, fuelling higher gold purchases. Having said that, this is a busy buying season, and with gold being a valuable hedge against inflation, any further price declines in the coming weeks could result in a surge in demand,” he added. Senco Gold and Diamonds managing director and CEO Suvankar Sen opined that this year the industry is likely to witness a standardised demand as things have gone back to normal after an exceptional 2021, where the sales were mainly driven by revenge purchases after the country gradually came out of the disruptions caused by Covid-19. “We expect the growth in sales will be either in high single-digit or low double-digit compared to last year, but the ticket size will be low, which will be compensated by higher footfalls,” he said. Weak prices may not have much impact on sales as the weak rupee has restricted further fall of the gold price, he said. “This year, the sales might get a boost as Dhanteras falls on a weekend and is spread over two days. After a good first quarter and a muted second quarter, the industry is looking forward to a positive third and fourth,” he added. Commtrendz director Gnanasekar Thiagarajan said it is likely to continue this weak trend on the back of ongoing interest rate hikes. However, these hikes are eventually going to affect the US economy and weigh on the dollar in the coming quarters, he noted. “But, as we move forward into US midterm elections, gold could once again come in flavour as a safe haven because gridlock is expected in the elections. In the global markets, we expect prices to test USD 1,545-1,550 on the downside and in the domestic markets close to Rs 48,000 in MCX,” Thiagarajan added. Meanwhile, Kalyan Jewellers India Executive Director Ramesh Kalyanaraman said with consumer sentiment shifting from unorganised to the organised sector, the organised players will gain during this Dhanteras. Last year was an exceptional year as the country came out of the pandemic, however, with the ruling weakness in gold prices and no pandemic-related uncertainties, things are looking positive this year, he said. “We have high hopes and are expecting a better and stronger Dhanteras compared to last year. For us, the pre-booking is strong and our e-commerce division, Candere, has done well and has gained popularity. We have also gained a lot of market share with the opening of more stores resulting in an increase in customer base. We are looking forward to a positive year this Dhanteras,” he added. PNG Jewellers chairman and managing director Saurabh Gadgil said that this year has been very strong since the beginning of the festive season, mainly supported by the weakness in the gold price. “We expect this trend to continue during Dhanteras and Diwali as demand for jewellery remains strong. Even as 2021 Dhanteras was exceptional, with the current momentum we expect around 20 per cent growth in sales this year compared to last year,” he said. The pre-booking this year is slightly low as customers are mostly buying ‘off the shelf’ due to attractive pricing, he pointed out. “We expect bullion, both gold and silver, as well as diamond to do well on the day of Dhanteras. The economy is back on track and the consumer sentiment is strong this year,” Gadgil added. Uttar Pradesh-based Aisshpra Gems and Jewels director Vaibhav Saraf said the consumer sentiment is positive and the industry is optimistic to achieve a growth of 15-16 per cent in sales this Dhanteras compared to the last year. However, unseasonal rains have caused crop damage and are likely to be a deterrent for demand, especially in the rural areas during this Dhanteras, he stated. Waman Hari Pethe (WHP) Jewellers Director Aditya Pethe opined that the consumer sentiment has generally been positive since April till Navratri. “There has been slack in sales during the few weeks before Diwali, but looking at the overall positive consumer sentiment, we expect it to pick up during the festival of lights. Overall we expect 20-25 per cent growth compared to last year,” he said. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.