Despite high prices, investment demand for gold and silver on the auspicious day of Dhanteras was stronger than expected, with bars and coins leading the demand. Jewellery demand is, however, estimated to be lower by 25-30 per cent.
Surendra Mehta, National Secretary, Indian Bullion and Jewellers Association, said that “in volume terms, we estimate that we will be able to meet last year’s figure of 35 to 39 tons. However, jewellery demand is expected to be lower by 25 – 30 per cent, high investment demand for bars and coins will match the total volume.”
With gold prices over 60 per cent higher than last Samvat and silver 75 per cent higher, there was apprehension in the market, but buyers continued to throng the market. In Mumbai, gold was trading at Rs 1,31,000-1,32,000 per 10 grams, while silver was quoted above Rs 1,70,000, including spot delivery premiums. However, silver bars making charges were quoted at a much higher rate than usual.
Sachin Jain, Regional CEO, India, World Gold Council, said, “We are getting reports from all centres suggesting consumers are excited to buy gold this Dhanteras. Even though prices have risen, consumer confidence in gold has continued to stay strong. In fact, purchases for next quarter’s marriage season have also been advanced.”
Interestingly, what is helping jewellers is buying new jewellery by recycling old jewellery. In recent quarters, 30-35 per cent demand was for exchanging old for new, but now “we see it has increased significantly and is estimated between 45 and 55 per cent,” said Sachin.
In many centres, Dhanteras muhurat is for two days. This is expected to help the festive demand further. Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers, said, “This year, Dhanteras Muhurat is on two days (18th and 19th of October), so the festive buying momentum is still underway. In the last 3-4 weeks, our festive pre-book offer has seen encouraging participation – notably, about 40% of the buyers this season are first-time customers. In the jewellery category, diamond sets are seeing renewed interest, and customers are choosing design-led jewellery sets from within the studded category.”
Retail chains are promoting low-karat jewellery also to budget customers.
Suvankar Sen, MD & CEO, Senco Gold & Diamonds, “This Dhanteras, consumers prefer budget-savvy choices. We’re seeing customers move to 18K, 14K and even 9K options to keep the joy of gifting alive without stretching household budgets, and many are using digital and EMI options to plan purchases.”
Digital gold and ETFs were also preferred avenues to invest in gold. Both these instruments have to actually buy a matching amount of gold from the physical market.
Samit Guha, Managing Director & CEO at MMTC-PAMP, said, “This year, we have witnessed approximately twice the billing value compared to last year. The industry is further seeing record inflows into digital gold and gold ETFs, along with rising acceptance of silver.”