Gold is set to regain its sparkle this Diwali as jewellers are expecting up to 30 per cent sales growth over the pre-Covid levels on the back of a faster-than-expected economic recovery along with lower prices and pent-up demand.

The gems and jewellery industry witnessed a near washout during ‘Diwali’ and ‘Dhanteras’ 2020, following the Covid-19 related disruptions, including lockdowns and restrictions in movements across the country.

According to Ashish Pethe, Chairman, All India Gem and Jewellery Domestic Council, the country is witnessing a growth in momentum since ‘Shradh’, the third quarter of the calander year, usually considered a subdued month for the industry. However, the drop in gold prices to around Rs 42,500 per 10 grams level has resulted in uptick in consumer demand.

The healthy Goods and Services Tax (GST) collection in the last few months indicates that economic recovery is on track and the weddings postponed due to the pandemic taking place this year-end will boost gems and jewellery sales.

Meanwhile, the World Gold Council Regional CEO, India, Somasundaram PR said demand is primarily driven by what appears to be a firm grip on the pandemic with higher vaccination rates and falling infection rates, leading to a strong rebound in economic activity.

While gold jewellery demand increased by 58 per cent to 96.2 tonnes, investment demand for bars and coins also grew by 18 per cent, in the July-September quarter that tends to be seasonally subdued due to monsoons and inauspicious periods like Pitru-Paksha when buyers stay away. Softer gold prices have also generated significant consumer interest ahead of seasonal demand, according to WGC’s Q3 Gold Demand Trends 2021 report.

With the upcoming festive and wedding season, there is all the more enthusiasm towards gold demand, and this is anticipated to be the busiest gold-buying season, since the start of Covid-19 pandemic.