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Dhanteras 2024: Gold, jewellery sales seen down 15-16% on year

Dhanteras 2024: Gold, jewellery sales seen down 15-16% on year

Dhanteras 2024: Sharp increase in gold prices likely to limit sales, says India Bullion and Jewellers Association; value of gold sales likely to be steady.

Business Today Desk
Business Today Desk
  • Updated Oct 29, 2024 11:00 AM IST
Dhanteras 2024: Gold, jewellery sales seen down 15-16% on yearDhanteras 2024: Gold sales volumes are expected to hover around 25-30 tonnes

Dhanteras 2024: Gold sales on Dhanteras, a day traditionally marked by the buying of gold and jewellery, could be dull this year. The India Bullion and Jewellers Association expects a 15-16 per cent decline in demand this year because of the sharp increase in gold prices.

According to IBJA National Secretary Surendra Mehta, sales volumes are expected to hover around 25-30 tonnes, down from 30-35 tonnes last year.

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Nevertheless, the value of gold sales is likely to remain steady at around Rs 20,000-23,500 crore because of the increase in prices. Dhanteras marks the beginning of Diwali and is considered an auspicious time for purchasing precious metals, utensils, and other valuables. The day is significant for jewellers, who eagerly prepare for the festive rush by keeping their shops open until midnight, anticipating brisk sales and vibrant footfall.

“Gold jewellery demand during Dhanteras and Diwali 2024 is under pressure due to record-high prices, with gold hovering around Rs 80,000 per 10 grams. Despite this, jewellers expect demand to persist, particularly due to the ongoing wedding season and the cultural significance of gold during festivals,” Prithviraj Kothari, Managing Director, RiddiSiddhi Bullions, told Informist.

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Gold prices on COMEX have risen 40.7 per cent to $2,754.6 per ounce from $1,957.7 an ounce on Dhanteras last year which fell on November 10, 2023. On the Multi Commodity Exchange of India (MCX), gold prices have gained 31.6 per cent to Rs 78,532 per 10 gm from Rs 59,659. The price increase is lesser in India because the government lowered the import duty on gold and silver to 6 per cent from 15 per cent on July 23, leading to a fall in domestic prices.

“Gold price volatility may cause a temporary dip in sales. This can be mitigated with broader retail outreach and tapping into new markets," Saurabh Gadgil, Chairman and Managing Director, PNG Jewellers said, adding, “If international conditions stabilise and we see a short-term price correction, we could be looking at an exceptionally strong Diwali season.”

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Jewellers told Informist they are seeing very little distress sales or exchange of old jewellery for new. However, most festive and wedding buying occurred during late July and early August, when the gold prices were around Rs 68,000–70,000 and will now take physical delivery on Dhanteras. The prices have now surged by Rs 8,000–10,000 since then.

Jewellers are offering discounts and running various promotional schemes to attract customers to stores.

Sales may still match or exceed last year's levels in value terms as consumers shift towards lightweight jewellery and coins, Kothari said. Some retailers are seeing increased pre-bookings, which suggests that demand could stabilise even at higher price points. However, volume-based demand may struggle, he said.

"Volumes will take a hit by 12-15 per cent due to record prices. Value wise, we will see marginal growth of 10 per cent," Suvankar Sen, Managing Director and Chief Executive Officer of Senco Gold and Diamonds, said.

Weddings are also expected to add to bullion purchases. The end of festive season next week will be followed by a month long peak wedding season. Analysts expect buying for this marriage season on Dhanteras as well. Diamond light-weight jewellery is a driver along with wedding necklaces and bangles in gold, Sen said.

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Kothari expects rural demand, driven by the good monsoon, to help offset some of the slowdown in demand. Additionally, gold is an attractive investment, especially amid global uncertainties, which could further bolster demand during Diwali.

As prices have surged significantly, Sen said platinum chains and bracelets for men are a good alternative.

Published on: Oct 29, 2024 10:59 AM IST
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