Successive bad monsoons and overall economic slowdown have affected gold and jewellery sales.
Relatively stable price of gold and a series of weddings lined-up in summer are likely to result in an increase in sales of gold, according to India Gold Policy Centre of IIM- Ahmedabad. However, business sentiment among city jewellers is mixed. Successive bad monsoons and overall economic slowdown have affected gold and jewellery sales.
"The price of gold is fair now. There are close to 70 auspicious days for weddings , which is considered good for a season. Higher the number of days, higher the gold sales would be," said Arvind Sahay, chairperson of IGPC at IIM-A. Global geopolitical uncertainty will also shoot up the prices so anyone buying gold on now will have upside potential at price.
The wedding season in summer also failed to get the generally expected footfalls. Jewellers also do not see any downside in the price of gold which is hovering around Rs 32,500 per 10 grams, but at the same time they are not sure that people will use this as a buying opportunity.
"We do not see any unusual demand on the day of Akshaya Tritiya. Even for the wedding season, only those who have no option have made purchases. There is hardly any discretionary purchase," said Harshvardhan Choksi, former president of Shree Choksi Mahajan, representing jewellers in the city. The yellow metal is hovering around Rs 32,000 – Rs 33,000 per 10 gram, which is not high according to Choksi. "Investors can make purchases, but they are on a wait and watch mode," he said. Sahay said that bad successive Monsoons has affected rural demand, while overall economic slowdown has dented overall demand for gold and jewellery.
"Only those who have to buy because of some occasion are coming to the shops. Even in this segment, they are rationalising expenses. I expect that overall sales will witness a drop of about 25 per cent this season," said Chinubhai Shah, president of Shree Choksi Mahajan.
Jigar Soni, vice president of Jewelers Association – Ahmedabad said that gold yielded about 20 per cent returns in past six months, once again proving that it is a valuable investment option. "With clouds of uncertainty mounting over the global economy, gold will once again firm up. Those who buy now can have a good selling opportunity in future," said Soni.
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