Akshaya Tritiya sees higher demand for light weight and diamond jewellery
Gold jewellers in India were banking on a surge in demand at the country’s second-biggest bullion buying festival – Akshaya Tritiya to end a sales slowdown caused by import curbs. However, sales were lackluster this time. Trading at the exchange-traded fund (ETF) counter too was the lowest in the last five years. Owing to the prevailing conditions buyers preferred to buy lighter jewellery. According to few jewellers, there was an increase in demand for diamond jewellery as well.
The gold rush of Akshaya Tritiya is now a phenomenon that manifests every year with a certainty that pays no heed to mundane changes in economic fortunes. But the observance of the auspicious day has in recent times shed its multiple characteristics and come to be viewed only as an auspicious day to buy gold.
Auspicious gold buying is a big trend in India. Each year consumers purchase gold in the form of gold coins or jewellery. Gold coins with the Goddess Lakshmi on them are preferred, but the regular NIBR coins too see a healthy demand. Usually, gold and antique jewellery too does well on account of many consumers shopping for their wedding jewellery. Several younger customers scout for their desired jewellery piece before the festival and make the final purchase on Akshaya Tritiya.
Samir Sagar, Director of Manubhai Jewellers said that despite of price fluctuations, Manubhai Jewellers we expect a healthy demand and consumers will make gold purchases on Akshay Tritiya. As always, we continue to maintain a positive and optimistic outlook towards the market and foresee a good turnout.
Experts predicted polls may dampen the jewellery demand on auspicious day
“Due to the ongoing Lok Sabha elections there might be a problem in momentum this year during Akshaya Tritiya, as the general sentiment for bullion is weak. Last year, the price was very attractive,” All India Gems & Jewellery Trade Federation (GJF) Chairman Haresh Soni told PTI.
However, the industry is still optimistic as gold prices are ruling steady and expects sales, he said. “We are optimistic as the momentum has already begun in places where elections are over. We are expecting jewellery sales in small denominations,” he added.
Echoing similar views, Gitanjali Gems Chairman and Managing Director Mehul Choksi opined that due to government policies in order to restrict gold imports, there are not enough stocks in the market for the festival demand.
Naveen Mathur of Angel Broking added, “The general trend is that people are waiting for the election results to see where the market is moving. Moreover, the prices are steady with no indications of moving upward for the time being, creating a negative sentiment among consumers.”
Jewellers are betting on Akshaya Tritiya on boost sales
However, Tara Jewels Chairman and Managing Director Rajeev Vasant Sheth said this year the pre-bookings are looking good, looking pretty similar to last year. “We are expecting demand for gold to be like that of last year during this Akshaya Tritiya. Due to sudden decline in prices last year, the demand for gold shot up during April-May last year. This year the prices are ruling steady and pre-bookings are good and are looking similar to last year,” he said. He added that the lack of purchase during Diwali last year will spill over to this Akshaya Tritiya. According to World Gold Council, the intrinsic demand continues to be robust even as the government policies continue to haunt the industry.
“Everyone is prepared with their stocks, particularly the smaller jewelry that moves faster,” Soni said by phone from Rajkot, India on April 25. “Sales have been slow in the first three months of this year, and we expect demand to be better” at Akshaya Tritiya on May 2, he said.
“Consumer confidence is improving and the buying mood is buoyant right now,” Colin Shah, managing director of Kama Schachter, which retails diamond jewelry from India to Japan and Hong Kong, said in an e-mailed statement. “As a manufacturer, our order books have been fairly good for the season.”
Saurabh Gadgil, Managing Director of P.N. Gadgil Jewellers says, “The last few months have not been favorable in terms of sales for many jewellers across the country due to the fluctuations and new RBI norms. However, on the auspicious day of Akshaya Tritiya the sales are 5 to 10 times more than on a normal day.”
Jewellers announce new collections, attractive schemes and discounts to cash on Akshaya Tritiya
Jewellers have announced discounts on gold and diamond jewellery for the auspicious day, which sees a spurt in the sale of gold every year. “This year, we are optimistic about good sales during Akshaya Tritiya that falls on May 2. The sale of gold has been slow during the first three months of the year,” said Mitesh Khimji, director of Khimji Jewellers and regional chairman (east) of All India Gems and Jewellery Trade Federation.
But Pradymna Sahu, manager of a city-based jewellery shop, had a different opinion. “Gold prices are steady for the past few months. As there has been no rise in price, chances of investment in the precious metal is little,” he said. Before Akshaya Tritya, the price of 24-carat gold in Bhubaneswar was Rs 30,170 per 10 gm, while 22-carat gold costs Rs 28,230 per 10 gm. Silver cost Rs 4,503.00 for 100 gm.
Jewellers said sales this year cannot be compared to that of last year because of government restrictions on import of bullion. However, even with a huge deficit of raw gold, markets are expected to revive during Akshaya Tritiya. “Despite restrictions on the import of gold and other policy-related problems, we are expecting a growth of 15% to 20% during Akshaya Tritiya as compared to last year. Keeping in mind the needs of the people, we have also launched new lightweight designs, daily-wear items and traditional designs,” said an executive in the city’s Gitanjali Jewellery showroom. Maya Jewels by Gitanjali are offering a 20% discount on making charges and up to 25% off on the purchase of diamond jewellery. Some jewellers are also offering customers the chance to pre-book their favourite items. Discounts between Rs 2,000 and Rs 3,500 have been offered by some jewellers for every 10 gm of gold.
Vishal Jain, Director of Zahav Jewels shares, “Akshay Trititya is one of the luckiest days in the Indian calendar where gold buying is considered as a sign of good omen. Understanding the sentiments our customers attach to the metal, like all our collections, our Akshay Tritiya range is not run of the mill typical collection. It has the contemporary twist that evokes sensuality and has a modern touch. This year’s Akshay Tritiya range is inspired from Italian designs. To add to the joy of our customer’s on the special occasion of Akshay Tritiya we are offering a flat 10% off on gold making charges.”
Discounts, offers fail to spike jewellery sales
Akshaya Tritiya sales were lacklustre this time. Trading at the exchange-traded fund (ETF) counter too was the lowest in the last five years.
“Sales on the auspicious day were disappointing this time. As per the reports I get from different jewelers across the four regions, sales were 30 per cent down compared to last year. The general gloom in gold sales along with the restrictions on carrying cash and valuables during election time has actually affected consumer sentiment,” said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation. According to him, footfalls were more or less the same, but ticket sizes were less as customers preferred to buy lighter jewellery as if just making a token purchase to mark the occasion. And they bought jewellery rather than gold coins and bars, sales of which were “very less” compared to last year.
In south India, sales were however less only by 5-10 per cent. In other regions, sales were more than 35 per cent down. “The sales during the season as such have been lower by 30 per cent compared to last year,” added Mehul Choksi, chirman and managing director, Gitanjali Group. For Gitanjali, the ratio of gold and diamond jewellery sales remained 85:15 per cent this time as well.
Diamond jewellery sales were even lower by 50 per cent against last year. However, some jewelers who focused on diamond jewellery saw customers making their postponed purchases on Akshaya Tritiya. “The trend this year indicates more sales of diamond jewellery with about half the sales coming from pre-bookings. This is in line with our business model and is expected to give a fillip to our margins for the day,” Vikram Raizada, executive director and chief executive officer (retail), Tara Jewels said.
Gold ETF turnover on NSE stood at Rs 53 crore against Rs 691 crore last year. The trade volumes on Akshaya Tritiya have been growing during the past four years. Both the exchanges had extended trading hours for gold ETFs till 7 pm on the day. BSE had also waived the transaction charges for ETFs.
Few jewellers witnessed positive response on Akshaya Tritya
Wedding season and the auspicious occasion of Aksha Teej popularly known as Akshaya Tritiya brought smile on the faces of 250-odd gold jewellers. The auspicious occasion sent gold sales jumping to 40-50 per cent in metro cities. With gold prices hovering around Rs 30,000 per 10 gm mark and marriage season around the corner, customers keenly purchased the yellow metal. In fact, many experts suggested this to be best time of purchasing gold and silver as prices are expected to rise after new government is declared.
“Despite, the gold prices being volatile this season, our investors have been loyal to us. The wedding season purchases clubbed with auspicious gold buying has shown off a steady growth this Akshaya Tritiya. The sentiment for gold buying was upbeat and the festive season created an exciting atmosphere. Which is why May 1st being a holiday, brought many customers to the store. The footfalls this year were above average and we have observed a healthy 15% jump in sales of gold jewellery since the last year,” said Samir Sagar of Manubhai Jewellers.
Ishu Datwani, founder of Anmol Jewellers also witnessed a steady growth during Akshaya Tritiya. He shares, “Our sale was good & it was about 25% higher than last year. The market sentiment is quite favourable, with clients buying not just gold jewellery & coins, but even big ticket diamond pieces. We are looking forward to a good season ahead.”
“Past one week, sales have been on an upward swing. After elections prices are most likely to go up, and like last year, may cross Rs 30,000/10 gm for gold and Rs 50,000/kg mark for silver. In fact, if the BJP government comes to power, they have promised policies in favour of jewellery merchants, including relaxation of curbs on gold import and imposition of high import duty.” Ranjit Jain, managing partner of Sri Visakha Bullion Association and MD of Sanghvi Jewellers told to a newspaper.
Jewellers in south India, where Akshaya Tritiya is a big festival, have seen a surge both in gold and diamond studded jewellery even though price of the yellow metal is higher than last year’s Akshaya Tritiya. The spurt in demand has made World Gold Council optimistic about the entire year. Somasundaram PR, managing director, World Gold Council (India), said “We can see that there has been a reversal from an extremely policy driven negative sentiment to a positive sentiment. Jewellers in south India have witnessed the maximum footfalls since yesterday. Demand in western India has picked up today while northern and eastern India are witnessing general sales.” WGC expects that around 40 -50 tonnes of gold has been imported in April to meet the Akshyay Tritiya demand.