Gold bangles are seen for sale in a jewelry shop (Photographer: Kerem Uzel/Bloomberg)

Gold Dazzles On Dhanteras Despite High Prices

Gold and jewellery sales were seen to have gone up by up to 15 percent on Monday as consumer demand revived on reports of further jump in the yellow metal rates in the coming weeks. The sales were driven by the festive fervour of Dhanteras, an auspicious day for purchasing silver and gold.

The buying during the morning trade remained subdued, but picked up later as shoppers indulged in token buying, while some took delivery of their wedding jewellery. There was more demand for coins compared to jewellery.

Organised players like PC Jewellers and Kalyan Jewellers are expected to have seen better sales as quality, better designs at competitive prices attracted more footfalls.

Unorganised jewellery players in India -- the world's second biggest buyer of the precious metal -- make up for roughly 70 percent of the country's gold sales. The buying of such valuables continues till late night.

Consumer demand has revived on reports of further increase in gold rates up to Rs 35,000-Rs 40,000 per ten gram in the coming weeks due to a weak rupee. We estimate sales to be higher by up to 10 percent than the year-ago.
Nitin Khandelwal,Chairman, All India Gem and Jewellery Domestic Council

Gold prices are ruling high at Rs 32,690 per 10 gram Monday in the national capital. Ten grams would have set you back by Rs 30,710 in the Dhanteras of 2017.

"Anecdotal feedback from the industry suggests that though footfalls seems to be good, demand could be moderate," World Gold Council (WGC) India Managing Director Somasundaram PR said.

Among organised players, PC Jewellers Managing Director Balram Garg said, "We are seeing 10 per cent growth in volumes and 15-18 per cent in value terms compared to last Dhanteras."

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There was demand for both gold and diamond jewellery at its 95 stores spread across the country, he added. Kerala-based Kalyan Jewellers Chairman and Managing Director TS Kalyanaraman said, "We have seen positive momentum this Dhanteras and are expecting an 8-9 percent increase in revenue over last year based on early data."

The key contributors for this increase is the steady shift of clientele from unorganised to organised players like Kalyan, he said. The jewellery chain operates 100 stores in India.

"We are seeing growth all across our stores. Footfalls are gaining momentum from late afternoon. We are expecting better sales and a healthy double digit growth," Titan Company Senior Vice President (retail and marketing jewellery division) Sandeep Khulhalli said. As gold prices are ruling high, the demand is more for small to medium size jewellery, especially finger rings, earrings, bangles among others, he added.

Echoing a similar trend, WHP Jewellers Director Aditya Pethe said that the company had met the expected sale target with 10-20 percent growth in footfall, while Anmol Jewellers founder Ishu Datwani said he saw a 15-20 percent jump in sales on the Dhanteras day.

Stating that there was surge in gold and silver coins despite liquidity crunch and high prices, Kundan Group Director Vidit Garg said the company sees its coin sales to double this time from 75,000 pieces sold in the year-ago.

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The city-based Khanna Gems Pvt Ltd Managing Director Pankaj Khanna said the company has got into the bullion business this year and sold 20 kg of silver coins Monday. The sales were better than expectations.

India Bullion and Jewellers Association director and PNG chairman and managing director Jewellers Saurabh Gadgil said, "we are expecting 10-12 percent growth in gold and jewellery sales in volume terms and 25 percent jump in diamond jewellery sales."

Appreciating gold price is also prompting costumers to opt for gold, he added. However, gold refiner MMTC-PAMP India Managing Director Rajesh Khosla said that market was subdued as there was a general reluctance to enter the market. "Much of our demand for coins is from corporate this time."

Ideally, gold rates should have been around Rs 30,000 per ten grams, but the prices are ruling over Rs 32,000 per ten gram because of rupee depreciation. "The market is not able to adjust the increase of Rs 2,000 per ten gram," he added.

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