WITH Akshaya Tritiya expected to see more than token purchases of gold coins and jewellers hoping the coming wedding season will spur sales, premiums on the landed price of the precious metal are believed to have jumped to $70-90 per ounce, reports Devangi Gandhi in Mumbai.
“While most customers have been picking up gold and silver coins in the last few days, there could be some wedding season-led demand for jewellery,” Suresh Hundia of the Bombay Bullion Association told FE. On Wednesday, standard gold prices in Mumbai were ruling in the range of R30,250- 29,500 per 10 gm. Although prices in the home market corrected by 7% in March to levels of R28,000, there has been a slight rebound since early April, even as global gold prices hover near $1280 per ounce, the lowest in nearly three months.
Kumar Jain of UT Jhaveri is hopeful purchases for weddings will be strong given the higher number of muhurats – 72, most of which come up in the next two months. “Jewellery purchases may be high tomorrow going by the bookings for delivery,” Jain said.
Jewellery-led demand accounts for about 60-65% of India’s annual gold imports. In 2013, when prices in Mumbai were at a two-year low of Rs 29,940, 613 tonnes of jewellery were bought, data from the World Gold Council showed.
Indeed, gold prices may have been volatile moving in the range of Rs 32,000 to Rs 28,000, but investors have been loyal. “We’re hoping for a 10-15% jump in sales this Akshaya Tritiya due to purchases for the the wedding season. The Maharashtra Day holiday has added to footfalls,”Samir Sagar, director at Manubhai Jewellers confirmed to FE.
In the past year, buying was impacted by the economic slow-down. Prices have been volatile and jewellers are resorting to newer ways to attract buyers. Apart from discounts on making or labour charges and discounts on diamond jewellery, some jewellers have introduced gold rate protection schemes three to five days ahead of the Akshaya Tritiya, says Kiran Dixit, former marketing head of TBZ. “Customers are offered to book their jewellery beforehand with a down payment. They can take delivery on Akshaya Tritiya by paying a price which is either of the booking day price or the spot price, whichever is lower,” added Dixit. The industry is also hopeful that the recent rally in the equity market would trigger some hedging led purchases ahead of the election outcome.
“Investment demand is expected to turn healthy as investors may park some portion of their market exposure in gold to fence their portfolio ahead of the election outcome,” said Saurabh Gadgil of P N Gadgill Jewellers. He expects that sales in the two days to Akshaya Tritya to have been five to six times, the average sale seen over a weekend. Both the BSE and NSE have extended trading hours for Gold ETFs on Friday to up to 7 pm with the former also waiving off transaction charges.