Gold glitters on Dhanteras despite rise in prices on fears of further hike; sales up 15% after a sluggish start
Dhanteras is considered to be an auspicious day for buying gold, silver and other valuables and is largely celebrated in northern and western parts of India.
New Delhi: Gold and silver sales are estimated to have risen at least 15 percent on auspicious 'Dhanteras' Monday as consumers thronged jewellery shops for token buying, amid speculation that prices of yellow metal could increase sharply in the coming weeks, according to industry players.
On Monday, gold prices stood at Rs 32,690 per 10 grams in the national capital, an increase of 6.5 percent compared to Dhanteras in 2017 when the rates touched Rs 30,710 per 10 grams. Dhanteras is considered to be an auspicious day for buying gold, silver and other valuables and is largely celebrated in northern and western parts of India. The buying continues till late night.
What began as modest sales in the morning, picked up in the evening with big organised players like Kalyan Jewellers, Titan and PC Jewellers -- that have national presence -- witnessing better sales of both jewellery as well as coins. It was better both in volume and value terms compared to last Dhanteras, as per industry players.
"Consumer demand has revived on reports that gold rates could further rise up to Rs 35,000-40,000 per 10 grams in the coming weeks due to weak rupee. We estimate sales to be higher by up to 10 per cent than the year-ago (period)," All India Gem and Jewellery Domestic Council (GJC) Chairman Nitin Khandelwal told PTI.
Last year, gold sales were flat due to sluggish demand and KYC (Know Your Customer) related issues for buyers.
World Gold Council (WGC) India Managing Director Somasundaram P R said that anecdotal feedback from the industry suggests that though footfalls seem to be good, demand could be moderate. Consumers indulged in token buying, while some took delivery of their wedding jewellery. There was more demand for coins compared to jewellery.
Kerala-based Kalyan Jewellers' CMD T S Kalyanaraman said, "We have seen positive momentum this Dhanteras and are expecting 8-9 percent increase in revenue over last year based on early data".
The key contributors for this increase is the steady shift of clientele from unorganised to organised players like Kalyan, he said. Kalyan operates 100 stores in India.
"We are seeing 10 percent growth in volumes and 15-18 percent in value terms compared to last Dhanteras," PC Jewellers' MD Balram Garg said. There was demand for both gold and diamond jewellery, he added.
PC Jewellers has 95 stores nationwide.
"We are seeing growth all across our stores. Footfalls are gaining momentum from late afternoon. We are expecting better sales and a healthy double-digit growth," Titan Company Senior Vice President (Retail and Marketing Jewellery Division) Sandeep Khulhalli said.
As gold prices are ruling high, the demand is more for small to medium-sized jewellery, especially finger rings, earrings and bangles, he added.
Unorganised jewellery players in India -- the world's second-biggest buyer of the precious metal -- make up for roughly 70 percent of the country's gold sales. WHP Jewellers' Director Aditya Pethe said that the company has met the expected sale target with 10-20 percent growth in footfall, while Anmol Jewellers' Founder Ishu Datwani said he sees 15-20 percent jump in sales on the Dhanteras.
Stating that there was a surge in the sale of gold and silver coins despite liquidity crunch and high prices, Kundan Group's Director Vidit Garg said the company sees its coin sales to double this time from 75,000 pieces sold in the year-ago.
The city-based Khanna Gems Pvt Ltd's Managing Director Pankaj Khanna said the company has got into the bullion business this year and sold 20 kilogram of silver coins Monday. The sales were better than expected, he added
India Bullion and Jewellers Association (IBJA) Director and PNG Jewellers' CMD Saurabh Gadgil said, "We are expecting 10-12 percent growth in gold and jewellery sales in volume terms and 25 percent jump in diamond jewellery sales".
Rising gold price is also prompting consumers to opt for gold, he noted.
However, gold refiner MMTC-PAMP India's Managing Director Rajesh Khosla said that market was subdued as there was a general reluctance to enter the market. "Much of our demand for coins is from corporate this time," he said.
Ideally, gold rates should have been around Rs 30,000 per 10 grams but the prices are ruling over Rs 32,000 per 10 grams because of rupee depreciation.
"The market is not able to adjust the increase of Rs 2,000 per 10 grams," he added.
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