Gold prices surged 7% in the past 10 days to touch Rs 1.52 lakh per 10 grams, marking one of the sharpest short-term increases in recent months and prompting consumers to step up purchases as expectations of further gains outweighed concerns over elevated prices.
The rally has set the stage for higher spending in the upcoming festive season, even as sales volumes remain under pressure, according to jewellers.
“The price increase has prompted consumers to come out and begin purchasing the yellow metal as the rally in gold is expected to continue. Volume-wise, demand will be lower by 10% (year-on-year) due to high prices, but value-wise, it will be higher during the festive season that kicks off with Rakshabandhan on August 28,” said Joy Alukkas, chairman, Joy Alukkas Group.
Expectations that gold prices could soon cross Rs 1.60 lakh per 10 grams have encouraged some buyers to purchase rather than wait.
“As prices are increasing now, there is a feeling among customers that gold might soon cross Rs 1.60 lakh per 10 grams. So, they have started their purchases. NRIs (non-resident Indians) too come to India during July to attend weddings. They, too, are buying,” said Rajiv Popley, director of Mumbai-based Popley & Sons.
At the same time, retailers are seeing a decline in footfall.
Saumen Bhaumik, managing director, CaratLane, said it was too early to draw conclusions as the festive season had not yet begun. “The festive season hasn’t really begun yet, so it’s early to read too much into it. Footfall has seen a slight dip, but that could be due to several factors, not just gold prices,” he said.
Consumers are, however, adapting to higher prices rather than staying away from jewellery. Lightweight designs and lower-carat gold are finding greater acceptance, while silver is also emerging as an alternative.
“What we are seeing is consumers gravitating towards lightweight designs, 14-carat, 9-carat gold, and even silver buying with Shaya Diamonds, where the value equation feels more balanced. The underlying intent to buy remains intact,” Bhaumik said.
Ramesh Kalyanaraman, executive director, Kalyan Jewellers India, said jewellery buying for festivals and occasions is largely planned well in advance and remains driven by sentiment and tradition despite price movements.
“Customers typically budget for these events months in advance, and that intent remains strong even as prices fluctuate. Price volatility has a minor impact; customers occasionally time their purchases by shifting them for a few days, but they remain committed to buying for the specific festive occasion,” Kalyanaraman said.
According to him, what is changing is the way consumers are making their purchases. “Consumers are increasingly opting for versatile precious and diamond jewellery, while also considering 18-carat jewellery and value-led offers to make larger, occasion-led purchases more accessible,” he said.
Consumers are also increasingly thinking in terms of a fixed budget rather than the weight of the jewellery. “Jewellery conversations, which earlier focused largely on grammage, are now increasingly centred around a pre-decided budget and choosing the best piece within that value,” Kalyanaraman said.
