Festive Cheer Lights Up India’s Gold Sales on Key Buying Day
(Bloomberg) -- Indians flocked to jewelry stores on Tuesday on the biggest gold-buying day of the year, with a bumper sales period for precious metals that culminates in the festival of Diwali expected for the first time since the pandemic began.
Dhanteras is traditionally seen as the most auspicious day in the Hindu calendar to buy gold, with many shops remaining open until midnight and jewelers offering discounts and gifts. Indians typically buy ornaments for marriage celebrations, and coins and bars for investment surge during a series of celebrations that culminates with Diwali, or the Festival of Lights, which falls on Thursday.
Still, in the past two years sales have been subdued. While restrictions and fear of the coronavirus amid a weak economy and high prices have taken a toll, jewelers are now seeing healthy growth in demand.
Tata Group’s Titan Co. reported a 77% year-on-year jump in income in its jewelry division in the three months to Sept. 30, which is typically a lean demand period due to rains and lack of festivals. According to the company’s chief executive of jewelry, Ajoy Chawla, Indians are finally more comfortable with spending and wedding-led demand is high.
“All segments are witnessing a very good demand upsurge, whether it be the lower-priced or higher-priced segments, gold jewelry or diamond-studded jewelry,” Chawla said in an interview with Bloomberg Television. The jewelry sector is also benefiting because travel and other discretionary spending remain muted due to the pandemic, with gold attractive to many Indians who see it as a store of value, he said.
Other jewelers are also enjoying a more prosperous festival season in 2021. MMTC-PAMP India Pvt., a venture between the state-run MMTC Ltd. and the Swiss-based PAMP SA, has seen growing demand for its products from the end of September, according to Managing Director Vikas Singh.
‘Out of Stock’
“I am spending almost every other day speaking to Geneva saying ‘send me more, send me more’,” said Singh. “Gold is out of stock. Silver is out of stock.”
India’s only London Bullion Market Association-certified precious metals refiner and mint has recently started diversifying its portfolio from selling bars mainly to bullion dealers to setting up physical stores for coins and bars for retail investors.
“Our consumer journey has been an absolute sellout,” Singh said. “With the economic volatility, increasingly people have been wanting to invest part of their portfolio in gold and silver.”
WHP Jewellers, which has stores in Maharashtra, Madhya Pradesh and Goa, exceeded its sales target for Dhanteras by 35% at least. Other jewelers in Uttar Pradesh were “overwhelmed” by the footfalls this year and the World Gold Council pegged this Diwali to be one of the best in recent years even when benchmarked against pre-Covid period.
Bengaluru-based C. Krishniah Chetty Group of Jewellers has seen an increase of 65% in sales leading up to Dhanteras compared to pre-pandemic levels.
“We are actually unable to keep our inventory full due to more sales than production,” Managing Director C. Vinod Hayagriv said. Production delays due to Covid protocols, testing, and hallmarking backlogs are also causing difficulties in keeping stock in line with demand, he said.
©2021 Bloomberg L.P.