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Dhanteras 2024: Strong gold demand persists despite rising prices

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Despite a slight dip in sales volume due to rising prices, jewellers report steady purchases fuelled by festive sentiment and wedding season demand, with consumers opting for lightweight pieces and exchange deals to offset high rates

Mumbai: Dhanteras 2024 has witnessed resilient gold jewellery sales across India, with a 20 to 25 per cent surge in value terms, despite prices hovering around Rs. 80,000 per 10 grams. The festival, which marks the beginning of Diwali celebrations, saw particularly strong demand across North, West, and Central India.

Saiyam Mehra, Chairman of All India Gem & Jewellery Domestic Council, said,“On Dhanteras, the allure of gold shines brighter than ever, representing not just wealth but a deep cultural reverence that spans generations. We anticipate sales of 20 to 22 tonnes, translating to over Rs. 16,000 crore in value. The North has shown particularly strong demand, reflecting consumer confidence even amidst rising prices.” Mehra added that jewellers responded to the demand by expanding their offerings, providing a diverse range of products to meet festive needs, with the evening rush revealing a clear trend toward lightweight jewellery and gold coins.

However, some retailers have noted subtle shifts in purchasing patterns due to the high price of gold. Vastupal Ranka, Director of Rare Jewels – A Ranka Legacy in Pune, observed, “While gold volumes are down, silver sales are on the rise. Sales of gold coins and bullion have increased, as have silver artefacts, articles, and silver coins. Overall, the sentiment remains positive, but we are seeing a decline in gold volumes.”

Despite the price surge, many retailers have reported stable figures. In Mumbai, Suuraj Popley, Director of Popley Diamond & Gold Plaza, observed that while footfalls decreased, loyal customers continued their purchases. He reported, “With the recent peak in gold prices, our sales volume was affected, but not significantly. On this auspicious day, clients continued to purchase gold. Customers are exchanging their old gold jewellery for new pieces to mitigate the impact of rising prices.”

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The sentiment echoed in Varanasi, where Rajat Agrawal, Director of Shree Banaras Jewels, noted that with 22k gold rates at about Rs. 7,300 a gram, overall sales showed a slight decline in some areas compared to last year. He said, “Customers still show a strong preference for gold. This Dhanteras, we did experience new footfall, and customers made occasion-driven purchases for weddings, particularly due to our attractive offers.”

Malabar Gold & Diamonds reported impressive growth across all its stores, with Chairman MP Ahammed noting a 30 per cent increase in turnover to Rs. 3,484 crore this Diwali, compared to Rs. 2,680 crore last year. The brand opened 26 new stores this financial year, contributing to the robust growth figures. He estimated nationwide gold transactions reached approximately 39 tonnes, valued at nearly Rs. 19,500 crores, attributing this to favourable monsoon conditions, rising gold prices, and increasing consumer preference for gold as a stable asset.

In Delhi, Arvind Bhola, Managing Director of Bholasons Jewellers, confirmed that despite reduced footfall, revenue rose as customers continued their gold purchases. “Gold prices have been steadily increasing over the past couple of years. While higher prices can lead to reduced sales volumes, our revenue has increased because customers are still willing to buy gold despite the higher costs,” he observed. He also noted a trend towards token purchases, like gold and silver coins, alongside significant occasion-driven purchases for weddings and Diwali, with some customers choosing to book their jewellery in anticipation of a price rise, for later delivery. Gold remained the top performer in sales, followed by polki and some diamond purchases.

The wedding season significantly influenced purchasing patterns, as observed by Vijay Soni, Director, Mahabir Danwar Jewellers,Kolkata. “Wedding-related purchases notably influenced our Dhanteras sales volumes, as customers sought gold jewellery for ceremonies and gifts. This year’s Dhanteras sales volumes have increased compared to last year, with a significant increase in bridal jewellery, particularly elaborate bridal sets and exquisite pieces designed for pre-wedding functions,” he explained.

Pratik Dugar, Director, Indian Gem & Jewellery Creation, Kolkata, reinforced this trend, noting that high gold prices did not significantly impact sales volume. “With the wedding season approaching, bridal jewellery experienced notably higher demand. Many customers specifically made purchases for upcoming weddings, highlighting the importance of Dhanteras as a precursor to the festive and wedding season,” he commented.

Chennai-based Prince Jewellery’s Director Antony Prince observed that while purchase quantities decreased, buying frequency remained steady. “This Dhanteras, high gold prices led to a slight dip in sales volume compared to last year, driven by volatility. Customers still prefer 22k gold. Token purchases increased, while wedding-related purchases are postponed as consumers await a price drop,” he explained.

Written by Achal Chaubey & Aparna Bhowmick

Retail Jeweller India Exclusive

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