High gold price has emerged as a dampener for April festive sales ahead of Poila Boishak and Akshaya Tritiya as buyers keep a close watch on price movements.
Jewellers expect diamond and platinum jewellery demand to rise this season.
Senco Gold and Diamonds is seeing a 15-20 per cent dip in volumes with pure gold prices north of Rs 72,000 per 10 grams in the city. In contrast, prices were around the Rs 60,000 mark a year ago.
Sales of diamond jewellery are on the upswing for Senco with a year-on-year growth of 25 per cent. With the company diversifying into lab-grown diamonds, the share of diamond jewellery in total sales is expected to grow from 11 per cent at present to around 18 per cent over the next three years.
“If we look at the last one month period, we are seeing a 20 per cent year-on-year dip in volume. While there is demand for gold jewellery, the quantity of purchase has gone down because people are waiting and closely monitoring the price movement,” said Suvankar Sen, MD and CEO, of Senco Gold and Diamonds.
The jeweller hopes that discounts on making charges and schemes for long-term purchases of gold will translate consumer interest into sales.
“Gold has touched historic high prices in India resulting in near stagnant jewellery demand in the first quarter in both rural and urban centres,” said Sachin Jain, regional CEO of India, World Gold Council.
With analysts predicting gold prices to continue to climb to the Rs 80,000 mark, demand for gold jewellery is also expected to remain subdued in the second quarter.
“During the general elections for the next two months, there will be heightened scrutiny on the movement of gold and cash. Except during festivals, gold jewellery demand will likely remain subdued during a large part of Q2, even if prices moderate over the coming months. On the flip side, higher prices could encourage investment into gold-linked digital and investment products,” Jain said.
“On a year-to-date basis, gold prices went up by 7.4 per cent in the Rupee term, which indicates that gold continued its outperformance in 2024 as well,” said Axis Securities in a report.
