Jewellery buyers paused on fresh orders on Wednesday, due to a sudden rise in gold prices, following similar moves in global markets and depreciation of the rupee against the dollar. Jewellers have started offering discounts and other incentives to lure customers.
Gold appreciated by over Rs 800 or 2.6 per cent in early afternoon trade to Rs 31,550 per 10g in Mumbai'z Zaveri Bazaar on Wednesday following global moves. But, the metal fell marginally from this level to close the day at Rs 31,180 per 10g, a rise of Rs 405 from the previous day. Similarly, silver closed on Wednesday with a gain of Rs 1,050 at Rs 60,775 a kg.
The lifetime high has been $1,920 an oz, struck in September last year. In the US, the metal for delivery in December rose $14 to $1,729.18 an oz yesterday Both gold and silver started rising yesterday on expectations of President Barack Obama winning re-election, recovering all the losses registered on Friday following better jobs data in the US.
"There is certainly a decline in sales today, as customers abstained from fresh purchases. Diwali being about a week ahead from now, customers can afford to postpone new buying. However, they would come back once the price stabilises or corrects from the current level," said Sandeep Kulhalli, vice-president (retail & marketing), Tanishq.
Tanishq has aimed to get only double-digit growth in sales after a 40-45 per cent annual growth for the past five years. It is offering a 20 per cent discount on making charges for plain gold jewellery and 10-20 per cent off on diamond ornaments.
Another leading branded jewellery manufacturer and retailer, Gitanjali Gems, has come out with various schemes to lure customers during this Diwali season, which accounts for around 35 per cent of India's overall ornaments sales. Gitanjali's offer covers all its brands, such as Asmi, Gili, D'damas, Nakshatra, Parineeta, Sangini, etc. It offers free diamond and pearl jewellery with every purchase of more than Rs 15,000 this season.
"We expect to clock around 25 per cent more business valuewise this year compared to last year through various sales schemes," said Mehul Choksi, chairman, Gitanjali Group.
"We have seen around 50 per cent decline in customer footfalls on Wednesday after the price rise. However, we expect customers will come back on the auspicious occasions of Dhanteras and Diwali," said Sunil Jindal, managing director of Delhi-based SRS Jewells.
Our Chennai reporter adds
The World Gold Council (WGC), the market development organisation for the industry, is expecting the demand for gold to be around 800 tonnes for the year in India, compared to 933 tonnes during 2011. Demand was low for the first half of the year and the Council expects the market to pick up momentum in the festival and wedding seasons, said a senior executive from WGC. Speaking to reporters after the launch of WGC's wedding jewellery brand, Azva, in Chennai, Vipin Sharma, director, jewellery, said, "Demand came down in the first six months. The trend is picking up and there is positive movement."