Gold jewellery sales in India fell 30% to 1,600 kg on average in the past fortnight, according to the India Bullion & Jewellers Association (IBJA), as prices shot up nearly 5%.
“In the first fortnight of May, which was followed by Akshaya Tritiya, there was some momentum as prices started falling, touching Rs 92,365 per 10 gm on May 15. But since then, the price of the yellow metal has again started to move northwards, which has dampened the demand,” said Surendra Mehta, national secretary, IBJA.
On Tuesday, retail gold prices hovered around Rs 96,960 per 10 gm. With a 3% goods and services tax, the price of 10 gm of gold stood at Rs 99,868.
“Mumbai, the nerve centre of the gold jewellery market in the country, has witnessed daily average retail sales of gold jewellery tumbling by 105 kg,” said Mehta.
Kumar Jain Kumar Jain, owner of Zaveri Bazaar-based Umedmal Tilakchand Zaveri, said, “Customers are coming and enquiring about prices and are leaving without purchase. We have seen a 25% drop in demand. Post-Akshaya Tritiya, there was movement in the market, but that has waned.”
Kavita Chacko, research head of India at World Gold Council, said stability in prices could prompt a resurgence in demand in the world’s second largest consumer of the yellow metal.
Jewellers in southern India are also facing a demand drop, even though it is the wedding season in Andhra Pradesh and Telangana. Verghese Alukkas, managing director of Joy Alukkas, which has 50 stores across southern India, said, “We have seen a 15-20% drop in demand in the last fortnight.”
Aksha Kamboj, vice president of IBJA, said heightened tensions between Russia and Ukraine, despite ongoing peace negotiations, have further contributed to the muted market sentiment. “These geopolitical and trade-related uncertainties have overshadowed expectations that the US Federal Reserve may delay interest rate cuts until September. In the near term, gold’s safe-haven appeal is likely to strengthen as investors seek stability. Looking ahead, the upcoming non-farm payrolls data on Friday will be a key catalyst for bullion price movements,” he said.
