There has been a dramatic change in the sentiment in thejewellery market in the last few days with jewellers witnessing a 25-30 per cent increase in sales on a sharp decline in the price of gold.
Standard gold in Zaveri Bazaar declined by 4.34 per cent, or Rs 1,335, over the last week to close on Friday at Rs 29,845 per 10 gm on global cues. “Gold saw selling on a strengthening dollar against major global currencies on expectations that the US Fed would raise interest rates in December,” said Prithviraj Kothari, managing director, RiddiSiddhi Bullions.
In the global markets, gold declined to close on Friday at $1,258 an oz, nearly 5 per cent lower than the previous week.
Silver closed in Mumbai at Rs 42,385 a kg, a decline of 8 per cent in one week. Until last week consumers were focusing more on replacement jewellery. They have now started placing fresh orders on expectations of a correction in gold prices.
“Our sales have increased by 30-40 per cent over the last week following a decline in gold prices. Given that the current price level will continue, we see this season as one of the best festive seasons in terms of jewellery sales in recent years,” said Rajesh Mehta, managing director, Rajesh Exports, one of the largest jewellery retailers in India. Jewellery retailers are still offering discounts on making charges but experts believe they will soon withdraw or lower their offers.
Scrap jewellery sales have declined as consumers see a good opportunity now for freshinvestment in gold.
“Our sales have increased both offline and online by 25-30 per cent in the last few days, thanks to a sharp fall in gold prices,” said Mehul Choksi, chairman and managing director, Gitanjali Gems.
Kumar Jain, director, Umedmal Tilokchand Zaveri, a bullion dealer and jewellery retailer, however, does not foresee long-term investment demand. Investors would probably expect a further fall in gold prices to $1,200 an oz in overseas markets, or Rs 28,500 per 10 gm in India, he said.
Discounts in gold sales have narrowed to $10-15 an oz now from over $25-30 an oz about two weeks ago.