Dhanteras set to glow as gold, silver prices slide
Avinash Gupta , vice-chairman, All India Gem and Jewellery Domestic Council (AIGJDC), said customer walk-ins and purchases picked up after prices slid below $4,000 per ounce. In May, the Indian govt raised import duty on gold to 15% from 6%, further increasing domestic prices. He estimates gold sales at 51-52 tonnes this festive season as compared with about 46 tonnes last Dhanteras, and silver sales at around 300 tonnes against 250 tonnes last year festive season. Gupta of AIGJDC said lightweight jewellery, especially 18-carat products, is gaining traction as buyers seek more affordable options. Exchange of old gold is also supporting purchases as consumers replace heavier 22-carat designs with 18-carat and 14-carat contemporary jewellery, he added.
He said demand had weakened by nearly 40% over the past six months due to high prices. 18-carat jewellery can reduce the effective ticket size for customers because of lower gold content and lighter designs, according to him.
He said lower prices have sent buyers back to showrooms and are encouraging them to make bookings. “There is a benefit of about 35% for the buyer, which gives them an edge to purchase,” he said. Pointing out that customers have become more comfortable with current gold rates after seeing higher levels earlier, Darshan Gupta, partner, Mangatrai Jewellers, said customers are back to making bookings and purchases. He said demand is moving away from bullion and coins toward lightweight jewellery and lower caratage pieces ahead of the upcoming Dhanteras and wedding season. He said jewellers are offering discounts on making charges as well as studded jewellery to convert enquiries into sales.
On silver, Gupta of AIGJDC said investment demand may remain subdued after the sharp volatility in prices, though token buying is expected during Dhanteras.