'Dhanteras' helps jewellers mitigate COVID blues, gold demand up

NEW DELHI: The occasion of 'Dhanteras' considered auspicious in India has brought about some relief to the jewellery market which has largely been subdued amid the pandemic with poor demand.

Although gold prices have been hitting the roof and setting new benchmarks in the past few months, but that has largely been on the back of investment demand. Consumer demand for gold jewellery has been tepid, and jewellers have been pinning their hopes on festive season of 2020 to garner back the lost demand. Somasundaram PR, Managing Director for India at the World Gold Council noted that the price rally of 29 per cent this year adds to the momentum of the tradition of buying gold in varying forms and quantities in Dhanteras.

"It has been a challenging year but it appears that Dhanteras could mark a new beginning with gold leading the way in reviving consumer confidence and positive sentiments, reinforcing the widely held belief," he said.

Somasundaram, however, said that the challenges of lockdown have not gone away, and the expectations remain tempered by the fact of high and volatile prices, persisting anxieties of small businesses and unorganised workforce, and a general caution in the air about COVID.

"Organised players with meaningful tech interface and better response to emerging buying behaviours, and digital gold platforms promoting micro savings and safe gold accumulations, are expected to do well," he said.

C. Vinod Hayagriv, Director and Managing Director, C. Krishniah Chetty Group Of Jewellers said that the company is expecting a 20-25 per cent revival during Dhanteras and Diwali festive season.

"We are expecting a 20-25 per cent revival during Dhanteras and Diwali festive season. We have reached 85% per cent of pre-COVID sales so far and are hopeful that festive buying and wedding-related purchases will help us to reach at least 85 per cent of last year's sales level during the period," he said.

He noted that for Dhanteras and Diwali customers at have been more interested in wearable jewellery. In comparison to last year the online buying of gold has been in vogue this year due to the pandemic.

On Friday, gold futures rose marginally. On the Multi Commodity Exchange (MCX), the December contract of gold is currently trading at Rs 50,650 per 10 gram, higher by Rs 50 or 0.1 per cent from the previous close.

Pankaj Khanna, Chairman of Gem Selections & Khanna Gems Group said that the company's sales across its stores during Dhanteras — Thursday and first half of Friday — has surges to of Rs 1.81 crore with volume of around 11,000 units in contrast to the sales of Rs 65 lakh with volume at 3,500 units last year. He, however, added that the growth in sale has been supported by the opening of new stores and dealerships this year.

He noted that people are buying bullion more instead of jewellery. "People have started purchasing more of gold coins, silver biscuits and precious gemstones like Sapphire and Emerald, more with an invested viewpoint," Khanna said. (IANS)

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