Jewellers hope gold, diamond will add shine to festivities

According to dealers and jewellers, sales of gold and jewellery items had dropped after demonestisation in November 2016

| Mumbai | Updated: October 17, 2017 1:52 am
Mumbai jewellers, Mumbai jewellery shop, gold, diamond, diwali, Mumbai diwali, Mumbai news, latest mumbai news, indian express, indian express news According to dealers and jewellers, sales of gold and jewellery items had dropped after demonestisation in November 2016 (File)

Dealers in precious metals, stones and gold expect a 10-15 per cent increase in purchase of gold jewellery this festive season compared to last year. Increased spending capacity, coupled with stability in prices of gold are said to be the reasons on which the hopes are resting.

According to dealers and jewellers, sales of gold and jewellery items had dropped after demonestisation in November 2016. Strikes by jewellers against the 1 per cent excise duty on non-silver jewellery announced by the Finance Ministry earlier this year, followed by implementation of the Goods and Service Tax (GST) led to reduced investment in gold by the buyers that caused the dip in gold purchase in the past one year, dealers said.

“This year’s Diwali outlook seems bullish. Surge in gold pricing has come down and it has stabilised. Hence, we feel this year, the demand for gold and gold jewellery will be up by 10 to 15 per cent compared to last year. The market sentiment seems positive for both investors and buyers,” said Saurabh Gadgil, the Chairman and Managing Director, PNG Jewellers and Director, Indian Bullion Jewellers’ Association.

An increase in purchasing capacity of consumers after the Seventh Pay Commission and bonuses received by different segments of the working class are also some of the reasons. “Stability in gold prices has revived the confidence among consumers to spend. With more bonuses being offered to employees, we expect a higher turnout to buy gold compared to last year,” said Nitin Khandelwal, Chairman, All India Gems & Jewellery Trade Federation (GJF).

Last week, the government reversed an earlier notification that had asked for consumers’ Permanent Account Numbers (PAN) for jewellery purchase exceeding Rs 50,000. This rung in festive cheer for the sector and potential customers, dealers added. “The requirement of PAN for purchase of gold exceeding Rs 50,000 was a dampener. This (reversal) has erased any kind of confusion among the gold buyers and lent them a free platform. We expect the sale of gold to be on the rise till March next year, as it is the wedding season, followed by Gudi Padwa,” Gadgil said.

According to data of the World Gold Council, the demand for gold in India for the second quarter of the 2017 fiscal was at 167.4 tonnes, up 37 per cent compared to the 122.1 tonnes a year ago. The total jewellery demand in the country for the second quarter of 2017 was up 41 per cent at 126.7 tonnes compared to what it was a year ago.

The value of jewellery demand was Rs 33,000 crore, up 36 per cent from Rs 24,350 crore a year back. Sunay Gandhi, the CEO, Pristine Fire and Partner, Vishal Diamonds, said: “We are very optimistic about the ongoing festive season. As the season is approaching, we see certified diamond jewellery gaining popular among people. Furthermore, light-weight jewellery is also preferred for gifting purposes as they fall in a low price bracket.”

However, dealers expect the purchases to be made using debit and credit cards as people have become “habitual” to the use. “At least 60-70 percent of the purchases in gold and related items would continue to be made with cashless modes of payment. They (purchasers) have become habitual to the use and it also allows the authorities to verify the buyer’s financial details. We also expect the gold prices to rise,” Khandelwal said. Dealers added that there has been a rising interest among youngsters to buy gold and invest in jewellery this year. Discounts and promotions on fine jewellery could equally help the customers.

“We are seeing a significant uptick in giftable jewellery this season. Some of our popular gifting products are alphabets, and religious pendants and other light-weight items priced below Rs 15,000. Additionally, the industry is currently buzzing with various offers and promotions and people from all communities will avail this offer” Gandhi added. For the current calendar year, the World Gold Council has put India’s demand for the glittering metal between 650 tonnes and 750 tonnes. mumbai.newsline @expressindia.com

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