Softening of prices drives demand for gold during Dhanteras

The recent softening of the gold price has supported demand for the metal during Dhanteras.

Sales have picked up from 11 am on Friday and jewellers are expecting sales during the day to cross those of last year’s Dhanteras. Leading jewellery trade body India Bullion & Jewellers Association (IBJA) has indicated a 35% increase in volume terms over last year.

The price of 22 karat gold, which is used in jewellery, has fallen below Rs 50,000 per 10 gms, which has encouraged consumers to buy. Jewellers are witnessing a lot of pent-up demand in the market after a hiatus of almost eight months when concerns over the pandemic had forced consumers to avoid non-essential purchases and conserve cash.

“Sales have picked up very well since the morning. Reports emerging from different parts of the country are indicating 20% growth in demand compared to last Dhanteras. There is a lot of pent-up demand in the market,” IBJA’s national secretary, Surendra Mehta, told ET from Mumbai’s Zaveri Bazar. The IBJA later revised the estimate to 35% growth.

Mehta’s views were echoed by WHP Jewellers director Aditya Pethe. “Looking at the day so far, we can say that it has been very good. As far as the sales are concerned, we are confident that we would do as well as last year or even better, given how this particular day has been going,” Pethe said.

Jewellers observed excitement among their clients which they said they had not seen in the last few years.

“Today, since morning, the footfalls are decent, but we expect the footfalls to increase as the day goes by. In terms of percentage of increase in sales, we expect sales to be equal to or even more than last year,” said Ishu Datwani, the founder of designer jewellery firm Anmol Jewellers.

READ  Sunteck Realty plans to pump in Rs 5,000 crore to boost commercial portfolio

Tanya Rastogi, a director of Lucknow’s Lala Jugal Kishore Jewellers, said though people were a little apprehensive because of the coronavirus, they had been coming in, selecting their pieces and setting tokens for the jewellery.

“We’ve been seeing a rush since last night and early this morning as well, considering we have started the day earlier than usual. Looking at how the day has been going, we’re expecting a good Dhanteras this year,” Rastogi said.

Online jewellery firms and digital gold platforms too are witnessing a revival in demand. founder Rupesh Jain said: “While Dhanteras 2019 saw us close the day with 250 orders and clocking Rs 60 lakh in revenue, we are looking at 100% y-o-y growth currently. The trend is very promising with an uptick in ticket value by 40%. We hope to close the day with 500 orders at Rs 2 crore.”

Sachin Kothari, a director at digital gold company Augmont, said demand had doubled compared with last year’s Dhanteras on its platform. “The ticket size is Rs 3,000-4,000,” he said.

In the price-sensitive eastern market, people have come out to buy gold though jewellers said volumes were likely to be lower.

Suvankar Sen, the chief executive of Senco Gold & Diamonds, said: “The response for Dhanteras has been encouraging. Compared to last year, volume-wise we could be down by 15-20% but value-wise we are close to similar kinds of figures as gold prices have gone up by 30% this year.”

There is an increase of 10-15% in the sales of coins and bars, not just in gold but of silver also, Sen added.

READ  NCLAT to hear Shapoorji Pallonji's plea on Adani Power bid for Korba West Power on Oct 15



Please enter your comment!
Please enter your name here