Despite spike in price, Akshaya Tritiya sees brisk gold buying

Gold sales were reported at 40 tonnes last year; this might have been surpassed this year.

Jewellery sales jumped 20-25 per cent on the occasion of Akshaya Tritiya on Wednesday; many had booked their piece of gold to forestall a further price increase.

Even so, a sudden price increase failed to deter consumers.

However, a shortage of cash prompted a surge in dealing via cards.

After several months around Rs 28,500 per 10g, standard gold moved up over recent days, after a global move, to hit Rs 31,215 per 10g at Zaveri Bazar here on Wednesday, the highest in 19 months.

The momentum was slow in early April but then gathered pace.

“Despite all these, consumer sentiment has been very encouraging in both gold and diamond jewellery from the aspirational point of view this year. We would see double-digit growth in jewellery sales this year,” said Sandeep Kulhalli, vice-president at Titan Company, which sells the Tanishq brand.

Indian consumers were also enthusiastic about the 8.5 per cent positive return in gold investment since Akshaya Tritiya last year, after a 3.7 per cent loss the previous year.

Gold sales were reported at 40 tonnes last year; this might have been surpassed this year.

“Jewellery sales have been very positive this year as buyers booked ornaments to meet both their occasional and wedding requirements.

"We are expecting jewellery sales to report a significant jump in the evening session,” said Nitin Khandelwal, chairman, All India Gem and Jewellery Domestic Council (AIGJDC).

It should, however, be also noted that this year’s Akshaya Tritiya is not comparable to that of last year, beyond a point.

The occasion was spread into two days last year as compared to a single day this year; also the 'muhurat' (auspicious time) started after 3 pm.

Additionally, the occasion was celebrated over a weekend last year; it was a workign day on Wednesday.

While the price of gold moved in a narrow range last year, it jumped 11-12 per cent during the past two-three weeks.

T S Kalyanaraman, chairman, Kalyan Jewellers, said: “We have witnessed over 25 per cent growth in sales over the same period last year. The price of gold does not seem to have dampened the spirit of the auspicious occasion.

"We have witnessed a combination of big-ticket wedding purchases coinciding with the occasion, as also lightweight purchases. We believe this momentum will continue into the evening.”

Apart from physical buying, online buying is catching up.

Somasundaram P R, managing director of the Indian arm of the World Gold Council, the body of the mining industry,  said: “The gold market is more stable now after remonetisation of the economy and significantly improved compliance following the transition to the Goods and Services Tax environment.

"Online and digital forms of buying gold that are becoming increasingly popular augur well for sustainable growth compared to last year.”

“Historically, gold demand increases in case of price rise. This year also, consumers have rushed to book amid fear of further price rise,” said Ashok Minawala, Director, AIGJDC.

Ishu Datwani, founder of Anmol Jewellers, expects a 25 per cent rise in gold jewellery sales this year on Akshaya Tritiya.

Sentiment also got boosted with the government’s assurance over the quality of gold in ornaments. A day before, the Bureau of Indian Standards warned jewellers not to go for caratage disparity, failing which customers can claim refunds.

“The run-up to Akshaya Tritiya has been a bit slow on account of increased gold prices. Today being a working day, we were expecting a rush only in the evening.

"However, we have been positively surprised with the continuous flow of customers since morning. This Akshaya Tritiya, we are expecting double-digit growth,” said Vijay Jain, chief executive, Orra.

Photograph: PTI Photo