Dhanteras, the auspicious day today (Friday) to buy precious metals in the form of jewellery and coins has spiked consumer interest and they have been buying jewellery and silver utensils since morning.
It is still too early to say how much the demand will increase but so far the sentiment has been good with increase in footfalls and also increase in sales.
Gold prices tumbled after a month of steady run at Rs 31,000 mark to Rs 30,020 per 10 grams in the beginning of the month and since them consumer sentiment has been buoyed up.
Somasundaram PR, Managing Director, India, World Gold Council said that the festival has been good for the trade. “It appears that, as was widely expected, this Dhanteras has ushered in a new phase of optimism around gold, particularly after an unusually difficult first half. Consumers who have been deferring gold purchases are back and the demand for gold jewellery and branded coins seems to be much better than the previous year’s Dhanteras and Diwali festival.”
He reasons that good monsoons as experienced in all parts of the country coupled with a softening of gold prices have improved the sentiment. Somasundaran was optimistic about the upcoming wedding season which he said would be promising for the trade and consumers alike.
Retail trade is gung-ho about their prospects after seeing a rush in footfall since the morning of Dhanteras. They are expecting sales to continue through to Sunday when office-goers get their holidays for the season and step out with families to buy gold.
Vijay Jain, CEO, Orra Fine Jewellery which has 32 stores across India says that sales have seen a much better demand in the northern markets after a sluggish growth in the past four years. Gold coins have been in high demand especially 1 gm coins at Rs 3,000, 5 gm at Rs 15,000 and 10 gms at Rs 30,000. “We outsold our stock within a few hours of opening the store across the country,” said Jain.
Kishor Narne, Head of Commodities & Currencies, Motilal Oswal Commodities, said that the bullion traders were bullish on gold and are not surprised that demand has been good at the beginning of this season. Prices have been upbeat in the last 3-4 months and with a price correction in the last 15 days timed at the festive season, demand for the precious commodity has gone up.
Some stores have seen increased demand on the back of schemes and freebies that they offer customers. Ghanasingh Jewellers, which has two stores in the country – Bandra, Mumbai and Hyderabad said that they have seen a 20 percent rise in footfalls through the day so far (6 pm) compared to the previous year. What has attracted customers is the 50 percent discount on making charges and assured gift on every purchase. “We have seen a lot of demand for gold jewellery of 10 gms at a price of Rs 30,250 and also small ticket purchases of gold rings and earrings costing between Rs 5,000 to Rs 25,000,” said Krishaa Ghanasingh, Director, Ghansasing Be True.
Asher O, Managing Director (India Operations) - Malabar Gold & Diamonds, said that though the demand for the precious metal was subdued till September, but after that demand has picked up during festive occasion and we are expecting many customers for Diwali. “Compared to last year’s Diwali festival, we are expecting a 20 percent to 25 percent increase in sales during the celebrations,”.
According to jewellers and MMTC-PAMP India, gold demand has picked up in the wake of good monsoon and favourable price levels. There was positive response and more footfalls. There was robust demand for gold and silver coins as also bars this time as prices are at favourable levels. People are buying for investment purpose. We expect 15-20 percent increase in sales from over the last year," MMTC-PAMP India President (Marketing) Vipin Raina told PTI.
But more sales are expected in the later part of the day, with office-goers in big cities coming in for buying late in the evening, he added.
Gold prices are ruling at Rs 30,590 per 10 grams in the national capital, about 16.6 percent higher than Rs 26,230 on Dhanteras day in 2015. Silver traded at Rs 42,700 per kg as compared with Rs 35,410 per kg last year.
Echoing his point, Kalyan Jewellers Executive Director Ramesh Kalyanaraman said, "The advance booking for jewellery is up by 20-25 percent compared to last year. The update on sales figures will be known in the evening."
"Prices are lower when compared to last two months. Prices are more or less stable now and also demand has revived in view of the good monsoon," he said.
P C Jewellers MD Balram Garg said, "We are expecting 20 percent jump in volume and 30 percent in value terms as prices have gone up in the last one year."
The country's gold demand had fallen 30 percent to 247.4 tonnes during the first six months of 2016, from 351.5 tonnes in the year-ago period, as per WGC.
India is the world's largest gold consumer and imports a sizeable chunk of its total annual consumption of around 900-1,000 tonnes.
All India Gems and Jewellery Trade Federation former chairman Manish Jain said, "There is good response in most parts of the country. About 20-25 percent increase in sales is expected at the end of the day."
Jewelsify.com founder Hardik Kapoor said the company expects triple-digit growth rate this time compared to last Dhanteras.
There has been a drastic rise in diamond jewellery sale and customer's preference has shifted from gold bars to diamond jewellery, he added.
Stating that there is revival of gold demand, Lucknow-based Lala Jugal Kishore Jewellers Director Tanya Rastogi said, "The recent drop in gold prices has triggered sales among watchful buyers. Footfalls have been good."
Mumbai-based Manubhai Jewellers Director Samir Sagar said, "We are excited about the festive rush and are expecting an above-average footfall at our store, with a healthy 25-30% jump in sales of gold jewellery compared to last year."
Anmol Founder Ishu Datwani is expecting demand build-up for both gold and diamond jewellery since gold prices have gone down. "We are expecting at least 20-25 percent increase in sales this Diwali," Datwani said.
Waman Hari Pethe Jewellers Director Aditya Pethe, said, "This is our first year on e-commerce, and we have noticed a rise in sale on our online store too during this season where light-weight jewellery like pendants, earrings and rings have been popular."
Narne of Motilal Oswal Commodities expects a 15 to 20 percent rise in prices despite lack of global appetite. Prices would go up 15 percent to Rs 34,000 for 10 gms by next year, he said.
With inputs from PTI
Data contributed by Kishor Kadam
Updated Date: Oct 28, 2016 18:55 PM