Gold demand may see muted cheer this Diwali

retail
By retail November 12, 2020 16:45

Gold demand may see muted cheer this Diwali

Demand for gold is expected to stage a recovery during Dhanteras and Diwali festivals this week, though it may not be as robust as last year due to the twin effects of high prices and the economic crisis caused by covid-19.

The bounceback will be supported by high farm incomes this year and pent-up demand during the wedding season, according to industry experts.

Binaisha Zaveri, director of jewellery chain Tribhovandas Bhimji Zaveri Ltd said sales have begun recovering. “This year, we started our festive sales much earlier just to avoid the rush in stores and to maintain social distancing during the pandemic. During Diwali and Dhanteras, we are expecting sales to revive to last year’s level. Our online consultations and sales have also aided in our sales growth,” she said.

Echoing Zaveri’s views, Suvankar Sen, chief executive officer, Senco Gold and Diamonds, one of the largest retail jewellery chains in eastern India, said market sentiments have improved substantially since Durga Puja and Navratri.

Sen said he expects sales levels to match that of last year by value, though it may decline 15-20% in volume.

“The pandemic and the subsequent rise in gold prices has reinforced customers’ trust in gold as an asset class. Many people have done advance bookings of jewellery for the festive season. We are taking advance booking through omni channels which can contribute 15% of total sales. We also expect new online bookings on the day of Dhanteras,” he said.

The luxury segment is also mirroring the trend. Vikas Jain, founder, White Jewels said the market sentiment is not the best but people are always looking out to buy good jewellery.

“Considering the scenario, the sales were good in Navratri. Dhanteras and Diwali are considered to be an auspicious day for buying gold, silver and other valuables and are largely celebrated in northern and western parts of India. We are hopeful of a surge in demand ahead of Diwali and in the ongoing festive season. We are expecting a sequential growth from the previous year,” Jain said. Prices of the yellow metal, typically considered a safe havenb gloally, have been on a tear after the pandemic rocked equities in March. Gold prices in India touched 56,018 per 10 gram in August. From last Diwali till date, gold prices in India have risen around 25%.

Despite the improved demand, a mix of continued social distancing rules, economic slowdown and high gold prices are acting as a hindrance for several buyers. According to World Gold Council data, India’s gold demand fell 30% to 86.6 tonnes in July-September. Gold jewellery demand fell by 48% to 52.8 tonnes in the same period.

However, Prithviraj Kothari, National President, India Bullion and Jewellers Association Ltd said with most weddings delayed due to social restrictions and lockdown, there is a pent-up gold demand. “We are hopeful that gold sales during Dhanteras and Diwali will be better compared to last year irrespective of steep prices,” he said.

 

Courtesy : Mint Newspaper

retail
By retail November 12, 2020 16:45
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