Pandemic fails to quell appetite for gold on Dhanteras

Softening gold prices and pent-up demand have driven festive gold and jewellery sales with early numbers indicating strong sales on Dhanteras on Tuesday. Leading trade body, the India Bullion & Jewellers Association (IBJA), said this year’s Dhanteras sales are expected to return to pre-Covid levels and surpass those of last year by 15-20%.

“Reports trickling in from Zaveri Bazaar as well as from all parts of the country indicate that footfalls have been quite encouraging from 11 am onwards when the stores opened. It gathered pace as the day progressed,” said Surendra Mehta, secretary, IBJA.

Dhanteras is an auspicious occasion for buying gold and jewellery.

Gold is almost 6% almost cheaper than it was during Dhanteras last year, encouraging people to buy the precious metal. Adding to the lustre are elevated stock prices, still steep despite recent drops.

The trade had anticipated robust demand and restocked gold ahead of the festive season. Gold imports zoomed to about $24 billion in the April-September period, according to commerce ministry data released on Monday, nearly four times the $6.8 billion of imports in the corresponding period last year.

On Dhanteras day last year, the price of gold was hovering around ₹51,500 per 10 gm while this year the price is around ₹47,904 per 10 gm. “We are witnessing a renewed excitement among retail customers along with a significant rise in customer footfalls across our stores today and we are expecting a 30% rise in sales volumes,” said Ahammed MP, chairman, Malabar Gold & Diamonds.

Several factors have aligned to bolster sentiment.

“Pent-up demand, the overall festive mood and wedding purchases are all converging to create a surge in both gold and diamond categories,” said Ajoy Chawla, CEO, jewellery division, Titan Co. “We think this could continue right through to Diwali and hopefully beyond into the wedding season.”

Jewellers said people want to celebrate Dhanteras as they’re looking to break away from Covid anxiety and personal losses they may have suffered.

“This year jewellery buying trend has been about living life large. After two years of mental anxiety and challenges, customers want to spend and invest in jewellery for happiness and asset building,” said Suvankar Sen, CEO, Senco Gold & Diamonds. “We have seen larger pieces of necklaces in gold or diamonds and statement pieces of bangles, earrings, and rings getting sold.”

Sales are expected to get back to pre-Covid levels, with an increase of 15-20% from last year, Sen said.

Jewellers in tier two and tier three cities too witnessed brisk sales. “Compared to last year’s Dhanteras, we are on track to grow by 30% in terms of sales across all outlets,” said Vaibhav Saraf, director, Aisshpra Gems & Jewels, which has outlets in Gorakhpur, Ballia and Lucknow. “All our stores have witnessed good footfalls since morning.”