Since Dhanteras—the most auspicious day in the Hindu calendar for buying items ranging from precious metals to utensils—was celebrated for two days until 1.11 pm on Wednesday, jewelers expected more footfall in both online and offline stores.
Surge in Gold and Silver Prices
Gold prices have surged 33% to Rs 81,400 per 10 grams in the national capital, compared to Rs 61,200 on Dhanteras last year, celebrated on November 11, 2023.
Silver prices increased 35% to Rs 99,700 per kg on Tuesday compared to Rs 74,000 on Dhanteras day last year.
Buying Trends and Market Sentiment
All India Gem And Jewellery Domestic Council Chairman Saiyam Mehra said, “The buying trend is good despite high gold prices. In volume-wise, we expect 10% less than last year, while in terms of value, it will be 20% more.”
The sale of recycled jewelry also did well. Gold coins in 2, 3, 4, 5, and 8 grams and lightweight jewelry like chains, earrings, and bracelets were selling more, he said.
Bullion vs. Jewellery Demand
World Gold Council Regional CEO India Sachin Jain said, “I think the bullion consumption will be much stronger than jewelry.”
Kalyan Jewellers Executive Director Ramesh Kalyanaraman said, “Despite higher gold prices, demand has remained strong.”
Preferences by Buyer Demographic
Conservative buyers favored Shagun coins, while lightweight or 18k jewelry attracted younger shoppers. He said there was interest in elaborate pieces with the upcoming wedding season.
PNG Jewellers Chairman and Managing Director Saurabh Gadgil said, “Due to high prices, we are expecting volume to decline 5-10%.”
Wedding Jewellery Sales
Senco Gold and Diamonds MD and CEO Suvankar Sen, ”In the overall sales, 30-40% purchases were wedding jewelry and the rest were those buying a token to mark the auspicious festival.”
The high price will impact the volume, which is expected to dip 15% from last year at the same time, while the value will be up 12%, he added. He said many took advantage of the available offers and discounts to make purchases.
On the festival day, smaller items and coins were more in demand. Delhi-based Puran’s Jewellers owner Rakesh Kumar said bookings and orders have been solid.
Market Boost from Duty Cut
India’s gold demand witnessed an 18% on-year growth during the July-September quarter of this year to 248.3 tonnes, as the reduction in gold import duty resulted in a revival in jewellery demand, the WGC said in a report on Wednesday.
The overall gold demand during the corresponding quarter of last year stood at 210.2 tonnes, according to the WGC’s Q3 2024 Gold Demand Trends report.
Expected Full-Year Demand
However, with gold prices ruling at all-time highs, there might be an increased trend for investors to wait for price corrections. The full-year gold demand is likely to be in the range of 700-750 tonnes. In 2023, India’s gold demand stood at 761 tonnes.
Global Gold Demand
Global gold demand excluding over-the-counter (OTC) trading was steady year-on-year at 1,176.5 metric tons in the third quarter as higher investment activity offset reduced jewellery consumption, the WGC said on Wednesday.
Spot gold prices are up 34% so far this year, heading for the highest annual growth since 1979, due to uncertainty surrounding next week’s U.S. presidential election, lower interest rates, geopolitical risks and portfolio diversification. Gold hit a record of $2,771.61 per ounce on Tuesday.
Gold jewellery consumption, the biggest category of physical demand, fell by 12% in the third quarter despite strong growth in the major import market India, while global central banks, which actively bought gold in 2022-2023, reduced purchases by 49%.