Dhanteras Sales Sluggish as Buyers Turn Cautious about Skyrocketing Gold Prices

Retailers witness 20-30 dip in sales; lightweight, everyday wear jewellery moved well

Post By : IJ News Service On 06 November 2018 3:46 PM

Despite gold prices dropping to Rs. 31, 500 for per 10 gms, the precious yellow metal failed to bring happiness and a much needed momentum for the gold and jewellery industry.

“Consumers have turned cautious because of the rising gold prices. If compared to last year, the Dhanteras sales this year was certainly slow,” said Princeson Jose from Prince Jewellery, Chennai.

Dhanteras is one of the most auspicious days for gold and jewellery buying in India. Consumers, who believe in ‘mahurut buying’, usually buy gold/silver coins on this day as a mark of prosperity. Also, such coins are bought as gift (which is also called shagun ka sikka) for the family members. However, this trend is changing, said Rakesh Jain from Nikkamal Babu Ram Jewellers from Chandigarh. He further said, “There was a dip of almost 30 per cent in sales as compared to 2017. People were buying gold coins of 2 to 5 gms and that too was less. The trend of buying coins and the number of coins bought on this day has gone down considerably.”

It’s not just gold prices but overall market sentiments have been sluggish for the past few months. “We have witnessed almost 30-40 per cent dip in the sales as compared to last year. There has been a shift in consumer sentiments as far as gifting of gold and jewellery is concerned this year. Overall, the market has been very sluggish,” said Vikram Talwar from Talwarsons Jewellers, Chandigarh.

Also, there is a shift in buying from coin to jewellery. Giving a different point of view, Mehul Oswal from Mahendra Jewellers, Kolhapur said, “On Dhanteras day, consumers preferred jewellery over coins this year. We are witnessing this trend for the last three years. Call it economic situations or change of preference, instead of investing consumers are buying jewellery that they can use every day. Also, brides prefer to buy variety of small ticket items instead of investing in one big jewellery. Overall, I should say we could match to last year’s sales.” 

Small size, lightweight jewellery is preferred by the buyers. “Lightweight, small ticket items are selling. Overall, the market sentiments are not that great, which has affected the sales. I would say the Dhanteras sales has not been the same like last year. I think the economic situation is not in favour of buying,” said Mahesh Jagwani, Notandas Jewellers, Mumbai.

Ahead of the Dhanteras, the gold prices had touched Rs. 33,000 mark and there was an anticipation of dull festive season. However, some retailers had witnessed good footfall, which is a good beginning for the upcoming wedding season. “The Dhanteras sale has seen a positive figure as compared to last year and we have experienced over 7-10 per cent higher jewellery sales compared to last year Dhanteras. This festive season followed by a long wedding season is going to contribute substantially in sales. The consumers are witnessing new promotions and attractive schemes across India by Jewellers, thus giving a win-win situation for both,” said Nitin Khandelwal, Chairman, GJC.

As the buyers are turning cautious this festive season, Saurabh Gadgil, Chairman  & MD, PNG Jewellers and National VP, IBJA had some words of advice. He said, “This is the right time to invest in gold due to the current market situation. We may see an appreciation in the gold price in coming months in the bracket of Rs. 38,000 to 40,000 per 10 grams. Consumers are opting for both types of gold investments; physical as well as e-gold. It is of great significance to Indian investors to have tangible gold in their hands and at their homes to feel secure. It will take time for the customers to accept sovereign gold bonds or e-gold but both the options are open to the customers.”

This year, even the rainfall was below normal which has affected the farmer’s earnings. Farmers do form a major portion of Dhanteras buying in India. However, the retailers are waiting for the bridal season to completely kick-in, hoping that will bring in a much needed cheer. 

 

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