Spot gold prices on the MCX stood at Rs 31,490 per 10 gm, marginally higher than the level touched on the Akshaya Tritiya day on April 18, last year, but lower than Rs 33,250 at the end of February.
Jewellers are bracing for a lacklustre Akshaya Tritiya, considered auspicious for buying gold, on Tuesday, as demand has remained tepid. Tight surveillance on cash supplies owing to the ongoing elections has weighed on consumption in select cities. But, a drop in the prices in recent weeks may help reverse a slowdown in sales, some of the jewellers told FE. With the recent trend, while the established jewellers will likely see a muted 5-10% (average) rise in sales on Tuesday, the unorganised ones fear a slump.
“Sales could be at the last year’s level (on the Akshaya Tritiya), without much growth. However, many customers, who had deferred purchases in recent weeks to buy gold on this auspicious day, may come back to the market on Tuesday,” said Rajiv Popley, director at Popley Group.
Jewellers have seen decent sales on the Akshaya Tritiya since 2017, after two successive years of subdued growth on this day. Spot gold prices on the MCX stood at Rs 31,490 per 10 gm, marginally higher than the level touched on the Akshaya Tritiya day on April 18, last year, but lower than Rs 33,250 at the end of February.
Gold prices may go up again, as global equities come under pressure following the Trump administration’s announcement to go ahead with its plan to raise import duties on Chinese goods worth $200 billion. Indian gold demand rose just 5% from January to March to 159 tonne, against a marginal fall in the previous quarter, but it still trailed a 7% rise globally, showed the World Gold Council (WGC) data released last week.
The council now forecasts 2019 Indian demand at 750-850 tonne, against 760 tonne in 2018. WGC managing director (India) Somasundaram PR told FE rising rupee and a fall in local gold prices in March supported demand. However, annual demand, which used to touch 900 tonne more frequently until a few years ago, is unlikely to reach that level any time soon.
As such, small jewellers are struggling to attract customers as the government has, in recent years, introduced various curbs, including mandatory quoting of PAN beyond purchases of a certain limit and limited transaction in cash. Jewellers, in ways large and small, have resorted to offering discounts to woo customers on the auspicious day. Nevertheless, some big jewellers are expecting good sales.
Ahammed MP, chairman of Malabar Gold & Diamonds said, “Organised retail players will exert a greater impact on positive consumer sentiments, and lower prices are expected to be a key trigger in pushing sales on a higher trajectory. We expect sales growth of around 15-20%.” Ishu Datwani, founder of Anmol Jewellers, expects a 25-30% rise in his sales. “The sales graph is on an uptrend, and the consumer buying sentiment has been good since Gudi Padwa. There has been a good demand for small & big-ticket items especially in diamond jewellery,” he said.
Aditya Pethe, director of WHP Jewellers, however, forecast a modest 5-10% rise in sales for his company. “Gold earrings, necklaces and bangles in light-weight, contemporary settings will continue to be the bestsellers,” he said.