Consumers have cut their average ticket size for jewellery purchase by 40 per cent this Akshaya Tritiyaamid expectations of further price fall in gold prices.
Gold prices have declined by over 6 per cent from its lifetime record high of Rs 33725 per 10 grams hit on February 20, to trade currently at Rs 31800 per 10 grams. In the international marketsalso, gold prices have fallen.
With the buying sentiment gradually expanding over the last few years from the eternally southern and western Indian marketsto middle and eastern Indian states, overall jewellery demand is likely to rise by 20-30 per cent this year. Both, low end jewellery and gold coins are in high demand this season.
"Unlike in the past when consumers used to wait for an occasion or a festival to buy gold ornaments, they book the bullion of jewellery on price fall. So, jewellery sales rise on every price fall. This Akshaya Tritiya, however, average ticket size of jewellery purchases has declined by 40 per cent across the country,” said Nitin Khandelwal, Managing Director, Khandelwal Jewellers, an Akola (Maharashtra)-based jewellery retailer.
The spending cut by average consumers has boosted sale of low-end jewellery with an average ticket size of 5-10 grams in rural areas and 20-50 grams in urban areas. Gold ornaments like low-weight jewellery and coins are in high demand this Akshaya Tritiya.
"Stronger than expected United States and Chinese economic data points pushed gold prices down. A rally into equities and strength in dollar index was the reason behind sharp decline in last two three weeks. We expect some more correction in gold prices following a rally into dollar index and strength in global equities. Next support level is between $1,260- & $1,249.
Thus, we are expecting Indian consumer to gain from these fall as Akshaya Tritiyais will buy for this auspicious occasion,” said Abhishek Bansal, Chairman, Abans Groupof Companies. Consumers are placing advance order for gold to take delivery of gold jewellery on Akshaya Tritiya to gain from fall in international gold prices. According to the World Gold Council (WGC) report, total gold consumption is set rise above 850-800 tonnes in 2019 as against 760 tonnes reported in 2018.
“We are anticipating a good demand this Akshay Tritiya with an expected increase of 5-10% in sales this year. As the gold prices have increased, we feel it will reinstate the consumer’s faith into the category. Gold earrings, necklaces and bangles in light weight contemporary settings will continue to be the bestsellers,” said Aditya Pethe, Director, Waman Hari Pethe Jewellers.
Meanwhile, gold priceremained flat in the rupee term in last one year. Hence, consumers are preferring platinum over gold on this precious occasion. Trailing over gold by around a fifth of the current prevailing price, platinum has become a preferred choice for customers this Akshaya Tritiya on May 7 with jewellers offering innovative designs and discount on making charges to lure customers.
Platinum prices have turned around sharply over the last few years to trade at a massive discount to gold now from a wide premium. With jewellers have also found innovative collections to attract customers, platinum sales have ramped up over the last few years especially in the elite opulent class who prefers white over yellow gold.
In the benchmark London market, gold priceis currently quoted at $1277.3 an oz, nearly 31 per cent discount to the spot price of $882.4 an oz. This wide price difference, however, continues over the last one year. Around five years ago, platinum was trading at around 25 per cent premium to gold.
Courtesy - Business Standard