West Bengal’s biggest festival, Durga Puja, is round the corner and the market is in the midst of a shopping frenzy. Gold prices have seen a fall of 4% in the last month - making the new price ₹50,400 per 10 gm. This has driven the sale of gold jewellery to a great extent. Major retailers of gold like Senco Gold and Diamonds, Anjali Jewellers, Malabar gold and diamonds etc. are experiencing good traction in their outlets.
For two years, the pandemic restrained people from shopping freely and with the current pandemic situation under control, the markets are booming. According to the versions of big and popular retailers, gold purchases increased in August and it is expected that the market will see more leverage in the upcoming festive season. The Retailer Association of India has reported that jewellery sales in July-August were 36% higher as compared to the previous year. Major retailers are targeting eastern India to benefit from both Durga puja and Diwali sales. They are opening new stores in Assam, West Bengal, Bihar, and Orissa.
In India, a gold price is believed to have decreased due to negative global cues. The market has responded negatively to Jerome Powell, the chairman of the US Federal Reserve, saying that the institution will maintain its stringent policy measures. The decrease in the price of gold ahead of the holiday season will increase consumer demand since it will provide opportunities to purchase gold jewellery and satisfy pent-up demand. Additionally, demand has increased in the price-sensitive eastern regions. The managing director of Senco Gold and Diamonds, Kolkata outlet has stated that footfall in all their stores have increased and he expects improved sales as well during the festive season. He added that demand will increase if prices drop further.
The only drawback in this scenario is the government policy. If the government had not raised the import duty on gold from 7.5% to 12.5% there would have been more demand. Thus, gold is now a bit more expensive. Pointing out the positives, the festive season precedes the wedding season and that will bolster sales as well. Another emerging trend in the gold industry is the buying of gold coins. Indian customers are increasingly opting to purchase them as gifts and investment.
After a slump, the platinum market is also rediscovering its lustre. Due to the wedding and holiday season, it increased 30% year over year in Q4 of FY22. It is anticipated to reach pre-pandemic levels soon. Despite a Russian supply reduction, diamond jewellery companies have anticipated strong sales. Ovals, emeralds, long cushions, long radiant stones, and diamonds are in demand.