A dull Dhanteras for gold this year

Kolkata | Mumbai: Firm prices and a liquidity crunch in the market have flattened demand on India’s gold-buying festival Dhanteras, many traders told ET. Some said there could be a 5-10 per cent growth compared to last year but these sales are largely driven by light-weight jewellery.

Demand from rural India has not picked up as farmers are yet to receive minimum support prices for their crops. Rural India accounts for 60 per cent of the total annual gold consumption of 800- 850 tonnes.

“Dhanteras sales this year is expected to be flat though it is better than the last few months when demand was muted. Rural sales may not see a significant increase over last year as farmers are yet to get MSP,” said Nitin Khandelwal, chairman, All India Gem and Jewellery Domestic Council.

Saurabh Gadgil, vice president, India Bullion and Jewellery Association added that “sales could go up by 5-10 per cent at the best.”

High prices have been a stumbling block for gold purchases this Dhanteras. Gold was hovering around Rs 32, 846 per 10 gm with GST.

Gold snip 1

“Jewellers always eye the last quarter of the calendar year to maximise sales, driven by festive and wedding seasons. The price rise of gold will impact volumebased purchase to some extent,” said Ahammed MP, chairman, Malabar Gold and Diamonds.

“While safe-haven demand for gold has been rising internationally amid economic and political uncertainty, we are not seeing an impact because it’s countered by a weakening rupee in India,” said Arjun Raychaudhuri, CEO, MMTC-PAMP.

“We expect our Diwali sales of gold to remain the same as last year’s, with the weak rupee and the base effect of last year’s GSTrelated issues offsetting safe-haven and festive demand,” said Amit Kumar Suman, head of trading, MMTC-PAMP. There has been a change in consumer preference this Dhanteras-Diwali season buying, a CaratLane survey found. While gold jewellery is widely popular among the 26- 35-year-old category (leading with 44 per cent), diamond jewellery has turned out to be the first preference of 40 per cent of the 36- 45-year-old respondents and even 38 per cent of the 26- 35-year-olds.

Around 53 per cent chose to buy jewellery in the price range of 10,000-30,000. This clearly reflects that women are now choosing affordable jewellery for everyday wear over traditional pieces meant as investment.

In the eastern India, customers preferred diamond and platinum jewellery along with gold. Among younger customers, there is an inclination to buy daily wear jewellery. “There has been substantial growth of 20-25 per cent in sales through credit cards. Online and offline sales of bars and coins have taken off because of worldwide uncertainties,” said Suvankar Sen, executive director, Senco Gold Diamonds. PC Jeweller MD Balram Garg said sales across the company’s 95 stores are expected to be 15 per cent higher in value terms and 10 per cent higher by quantity. He said the trend was tilting towards light weight jewellery. PC Jeweller shares ended up 7.2 per cent to Rs 94.58.

Tanishq’s senior VP Sandeep Kulhalli said since Titan was to release its Q2 numbers this Friday he could not reveal estimates for Dhanteras yet. He said the company was confident of posting higher volumes than the year-ago.

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