People are getting used to Rs 50,000 plus range for gold. It would not take long before people just come out to buy as fears of Covid recede and priorities in life change, we will see a spike in demand.

In the second quarter (April to June), Indian G & J sector missed the Akshaya Tritiya celebrations as it was subsumed by the lockdown and so obviously the figures do not surprise us. "One cannot draw a trend based on the second quarter, but clearly the third quarter with the easing of lockdown did see the prices acting as headwinds," says Somasundaram PR, MD India. The prices have since sharply gone up. Together with GST, now it will cost Rs 55,000 per 10 grams. It will be some time before consumers get used to this price band.

Two things are important as far as Diwali is concerned, first: what is going to happen to Covid? While, of course, there has been an easing of the lockdown, are people really in a mood to go out and shop? If you have a wedding in the family, you will perhaps do that but even there, social distancing has taken away the joy of shopping for gold. So how much of this is going to remain during Diwali is a very important question. Post Diwali, in the fourth quarter, there is a wedding season which happens to be the best gold buying season for India every year. 

The Covid journey is going to determine all of this and no one knows whether things will be normal by Diwali, will there be a medical solution? So we do not know if the consumer sentiment will be back.

From the second quarter, it was a complete lockdown other than for a few centres. India saw 44 tons of gold being purchased despite the price going up. If that is any indication, there is a latent demand and people will come back to buy and we will see a spike.  

Certainly, online digital experiences and digital engagement is going to stay with us. Whatever people have experimented with during this lockdown, some of it will stay and it will be a very good change.

But is it in the immediate run going to make up for the way we were buying gold in the past? There are nearly 12 million weddings. Now how many of them are going to take place is also a very important determinant of gold demand. If they all get pushed to quarter one post the availability of vaccines etc, there may be some purchases, but it will mostly get pushed to the first quarter. 

In India, in the past, there have been quarters where demand has been as high as 320 tons. Now that all depends on a few factors coming together.