Diwali gold sales may be same as last year’s

Kolkata: Gold sales this festival season are expected to be at last year’s level or if not more, as industry executives said demand for light-weight jewellery and safehaven buying would help offset the impact of rising international price and weak rupee. Also, in play would be the base effect, as last year’s sales were hit by GST-related issues, they said.

With Dhanteras approaching, traders’ predictions range from flat to as much as 10-20 per cent growth in jewellery sales in the festival stacked last quarter of the calendar year. The recent crash in stock prices is expected to drive investment demand.

Jewellery sales on Dussehra, which sets the tone for the festive season buying, had not been encouraging this time, with local gold price touching Rs 32,625 per 10 grams. On Monday, the yellow metal was trading around Rs 32,850 in the national capital, inching towards the Rs 33,000-mark.

“As the gold price has crossed the Rs 32,000-per-10-gram mark on Dussehra day, thanks to the sliding value of the rupee and stock market crash, there is speculation in the market that the gold price rise will scare away gold jewellery buyers this festive season,” said Ahammed MP, chairman of Malabar Gold and Diamonds.

“Jewellers always eye the last quarter of the calendar year to maximise their sales, driven by festive and wedding seasons. However, the price rise of gold will impact the volume-based purchase to some extent (this time). The gold price rise on Dussehra may have affected consumer sentiment adversely,” he added, while saying that the sentiment would become stronger closer to Diwali.

Ashok Minawala, an ex-chairman of the All India Gem and Jewellery Domestic Council, said demand would definitely be at last year’s level and could even surpass that.