Mukesh Sharma, Chief Financial Officer of Indian retail gold brand, Tribhovandas Bhimji Zaveri (TBZ), believes gold prices are set to follow a steady upward trajectory in the near to long term, as consumers increasingly turn to the metal as a safe-haven asset amid ongoing uncertainty.
At present, gold prices in India are on a sharp rise, close to hitting the Rs. 1 lakh mark for 10 grams of gold, fuelled by recent global turbulence and the seasonal demand tied to the occasion of Akshaya Tritiya. The CFO of TBZ said that while global volatility continues to strengthen its hold over the economy, the correlation between gold prices and global uncertainty is also growing complex today.
Protecting Against Gold Price Fluctuations
When asked about managing working capital and inventory during periods of high gold prices, Sharma shared that TBZ follows a natural hedging strategy, buying and selling gold at the same rate on the same day or the next.
Hedging allows the company’s stock volume to remain the same without adding financial pressure. This strategy, commonly adopted by gold investors across India, serves as a safeguard against price fluctuations.
Shifts in Organised Jewellery Market
Often viewed as a conventional possession, gold is sometimes overlooked by younger consumers as a modern investment or fashion accessory. Addressing this shift, Sharma expressed his optimism about the growing preference for branded jewellery, providing the traditionally organised jewellery segment with more room to grow.
To cater to evolving consumer tastes, Sharma emphasised the company’s design approach which are craftily curated as per their Target Groups (TGs). In addition, the company has introduced a range of gold-purchase schemes, including its flagship Kalpavruksha Plan, to attract and retain a broader customer base.
Regulation in Retail Gold
Sharma spoke about the increased government regulation in the gold and jewellery space, highlighting the now mandatory nature of the BIS (Bureau of Indian Standards) hallmark in most Indian districts. He highlighted the regulator’s decision to bring the gems and jewellery industry under the PMLA act (Prevention of Money Laundering Act 2002), stating that these were steps in the right direction.
Debt Reliance
On TBZ’s approach towards capital raising, Sharma stated that the company has leaned towards raising debt, citing the flexibility it offers.
The retail gold and diamond jeweller had launched its IPO (Initial Public Offering) in April 2012 to raise 210 crores (upper price band), at a time when gold prices had been relatively low (around Rs. 26,000 per 10 grams), driven by ongoing sell-offs and declining gold imports.
According to a Motilal Oswal Financial Services report the ongoing trade tensions, rising tariffs, and fears of stagflation are fuelling strong demand for gold. With central banks boosting reserves and inflation concerns lingering, gold remains a safe haven for investors. The Federal Reserve’s cautious stance and President Trump’s push for lower rates add to the uncertainty, reinforcing gold’s appeal as a hedge in volatile times.
