Despite the high prices of gold jewellery and coins, customers flocked to jewellery stores on Friday to celebrate Akshaya Tritiya. While afternoon sales were average due to the heatwave, two of the largest jewellery firms with wide networks of chain stores in India and abroad said that they were expecting a large number of customers in the late evening and over the weekend, since the muharat extends for two days. There was buying activity observed in tier two cities as well.
The majority of jewellers expect to meet the volume demand of last year, which means that sales will be higher in value compared to the previous year. Sachin Jain, regional CEO, India, World Gold Council, told Financial Express, “To our surprise, people have pre-poned their big-ticket purchases for events like marriage and took delivery on Akshaya Tritiya day. Jewellers from across the country, especially in South India, have reported very high footfall in their stores.” Although the price of gold is 20 per cent higher compared to last year’s Akshaya Tritiya, “we expect the demand in terms of quantity to be met this time as well,” he added.
Initially, there were reports suggesting that customers would restrict their purchases to small-ticket jewellery weighing 2 to 5 grams. This indicates that customers could also be expecting for a further increase in gold prices.
Last year, the standard gold price on Akshaya Tritiya was Rs 59,550 per 10 grams, whereas today, the IBJA standard gold price closed at Rs 71,216 per 10 gm, almost 20% higher. Initially, there were concerns that the high prices would deter customers, but there was significant buying demand.
Prithviraj Kothari of Riddhisiddhi Bullion and national president of Indian Bullion and Jewellers Association said, “In terms of value, gold buying has been very good. Jewellers were skeptical about the demand today due to the 20% increase in gold prices compared to last Akshaya Tritiya. From that perspective, the demand looks promising and more customers are expected later in the day.”
He also expressed optimism about meeting last year’s demand in value terms by the end of the day. The fact that today is a working day and the hot weather seems to have been a dampener.
Some expect the demand to be higher as well. Rajesh Rokade, a prominent jeweller from Nagpur and vice chairman of the all india Gem and Jewellery Council, stated that they have observed a significant number of customers in large stores and the demand has been good. He said, “We won’t be surprised if we see higher demand in terms of quantity compared to last year, including demand over the weekend.”
Investment demand is also strong. Debajita Saha, lead analyst at LSEG, said that his conversations with leading players in the industry indicate that coins have been popular for both advance and spot bookings. He spoke to refineries that produce branded coins, and they reported that the coins were sold out. Refineries sell coins to stores.
