High prices may dampen Akshaya Tritiya gold demand

Chennai: With auspicious date Akshaya Tritiya just round the corner, gold marketers are ramping up their strategies to bulk up demand. While demand is good and the industry could do double digit growth in the quarter, the high price of gold is playing spoil sport. Gold jewellery brands are already offering pre-booking schemes so customers can be assured a less volatile price curve on the auspicious day. Others are rolling out new product range as well as offering discount schemes to ramp up demand.Said Somasundaram PR, MD India at the World Gold Council, “There is expression of interest from customers but at current prices demand is still a bit soft. We are not expecting runaway jump in demand but there will still be growth. People will buy gold but in smaller quantities given the increase in prices lately.”Already, say marketers, prices have gone up by around 20% in the January-April 2023 period and it has firmed up by 8%-10% in the last 20 days say gold marketers. Akshaya Tritiya in 2022 saw a sharp jump over 2021’s washout performance despite gold prices hardening. According to Somasundaram, India clocked a 30-year high quarter in December 2021 with 345 tonne gold sold. Overall 2021 saw nearly 800 tonne gold sold while 2022 saw 743 tonne sales.Gold marketers say given the high prices the slightly soft sentiment is understandable. Said Jayantilal Challani, president, The Jewellers and Diamond Traders Association of Madras, “Considering the high prices, the demand is good and we have seen very good pre-bookings in the last seven to 10 days. The levels are as good as last year and things will pick up more .” Given the price volatility – the per gram price has gone from 5,600 to 6,100 in the last month – customers were sitting on the fence. Said Ajoy Chawla, CEO, jewellery division, Titan, “Given that last year growth was much better than pre-pandemic 2019, that there will be growth this year is very good for the industry. Sentiment for festive buying is high.” Gold jewellers are rolling out schemes like fixed price bookings, range additions and light weight jewellery. “Thanks to our focus on lightweighting 62% of our everyday jewellery is now lightweight and we are now launching lightweight wedding range too,” said Chawla. The marketing push is understandable given that May-June are popular wedding months particularly in southern India and much of the wedding jewellery shopping happens during Akshaya Tritiya.