In India, buying gold can be a big part of the ongoing festival season. A good monsoon after four years of drought has given hope to jewellers that they will be celebrating better sales this season. Radhika Bajaj reports from Mumbai.
Gold is glittering just a tad more for buyers this festive season. In the past week, prices dipped below $1,300 per ounce. A potential down-trend for the yellow metal ahead of a looming US rate hike, could help spur demand. Jewelry industry bodies expect sales to jump 40% in price terms and 20% in volumes. Rural areas are expected to contribute heavily in those sales after a good monsoon lifted spirits and loosened purse strings post 4 drought years. The strategy of the industry to maximize sales is to focus on light weight jewelry.
"The moment you make lighter jewelry, you are making it more affordable. And when you make it affordable there is a larger number of buyers for that particular product line. You have larger sales for a lighter weight product and this is the area of focus for the entire industry as a matter of fact," said Ashok Minawala from All India Gems & Jewellery trade federation.
It’s tradition to buy gold jewelry in the festive season in India. Add to that a good monsoon and jewellers are expecting robust sales. But even then, many of them are offering festive discounts to ensure that gold is a bit more attractive for the buyer.
From discounts on making charges to free gold coins and even exchanging your old jewelry, there are many offers to pick from for gold shoppers. Jewellers say they are doing everything possible to make up for the losses they incurred during an over 40 day strike earlier this year to protest a new tax levy.
Director of Waman Hare Pethe Jewellers, Ashok Pethe, said, "There are many other categories that are vying for the money in the pocket. White goods and phones and things like that. So many jewellers are doing this to get the customer back in a sense to the jewelry category."
In fact the strike earlier in the year and a low retail demand up till September is expected to result in a 60% drop in India’s gold imports this year. The hopes for a demand spurt are now pinned on the festive last quarter which typically adds the shine to the jewellers’ balance sheets.
