Contrary to the fears of the last quarter, gold jewellery business has veered to the post-flood recovery trend in Kerala. Diwali season is likely to mark this phase, according to gold trade sources.
“The recovery of gold demand from the flood-hit August and the impending marriage season could propel a festival season demand,” according to Abdul Nazer, Treasurer, All Kerala Gold and Silver Merchants Association. “We are anticipating a sales growth of 15% in the Diwali season,” he told FE.
The latest gold purchase data report by World Gold Council says that India’s gold demand for the current fiscal is 523.9 tonne. In the previous year, this was 529.2 tonne. “Our analysis is that floods in the important gold buying centre like Kerala during July and August had negatively affected country’s gold demand,” says PR Somasundaram , MD, World Gold Council.
Kerala accounts for about 15% of the country’s gold jewellery demand and has the highest gold consuming state, second only to Tamil Nadu. India’s annual gold jewellery demand is around 600 tonne.
“The retail trade in Kerala during Onam was lackluster during Onam season, following the unprecedented floods,” says Ahammed MP, chairman, Malabar Gold and Diamonds.
“While usually we see a sales growth to the tune of 12-15 % in August, in 2018, we experienced a growth of 6% in gold sales,” he said. Traders count on the wedding season and the Diwali season sentiments to make amends for the dull demand in the Onam season.