Pre-Diwali Dhanteras sales of gold and silver witnessed a tepid response from consumers on Thursday on account of high prices of the precious metals and sluggish demand due to COVID-19 induced economic hardship, according to jewellers and industry experts.
However, jewellers are expecting maximum footfalls on Friday as Dhanteras -- considered the most auspicious day in Hindu calendar for buying items, ranging from precious metals like gold and silver to utensils -- is being celebrated for two days this year.
Although the buying sentiment has improved after the COVID-19 curbs were relaxed, consumers are still wary of investing in precious metal at current high rates.
Besides, a caution still prevails among people while coming out of their homes for shopping amid rising COVID-19 cases in key consuming markets across the country, and consumers in view of the pandemic have made advanced booking through online jewellery platforms like Melorra and Augmont.
Gold prices were ruling at Rs 50,057 per 10 gram on Thursday, over 31 per cent higher than Rs 38,096 per 10 gram prevailed on Dhanteras 2019.
Similarly, silver prices have shot up to over Rs 62,000 per kg.
Speaking to PTI, All India Gem and Jewellery Domestic Council chairman Anantha Padmanaban said there was not much footfalls on Thursday because the festival will be celebrated in most parts of the country on Friday.
Padmanaban added that the market is recovering gradually and the consumer sentiment is positive.
"This year, Dhanteras is overlapping on two days, we are expecting maximum traction on November 13 across the country.
“We expect the pent-up demand to translate into sales. In terms of volume, we expect to do 70 per cent of last year's business and in value wise similar to last year Dhanteras," he said.
World Gold Council (WGC) managing director (India) Somasundaram PR said, "The footfalls are better and people are interested. Sales are recovering but it will not be as good as last year during the same period."
The softening of gold price just ahead of this big day is also very supportive of demand.
However, the challenges of lockdown have not gone away, so expectations remain tempered by the fact of high and volatile prices, persisting anxieties of small businesses and unorganised workforce, and a general caution in the air about COVID-19, he said.
Organised players with meaningful technology interface and better response to emerging buying behaviours, and digital gold platforms promoting micro savings and safe gold accumulations are expected to do well, he added.
Malabar Gold and Diamonds chairman Ahammed MP said the pre-Diwali Dhanteras has kicked off with a decent buying season amid pent-up customer demand, revival of the economy and positive consumer sentiment.
The company is geared up for a great buying season with a host of offers to attract consumers’ interest.
"We are expecting encouraging responses from our customers," he said.
Tanishq vice president (marketing and retail) Arun Narayan said, "With the drop in gold rates in the last few days, we should see a very good Dhanteras this year."
Senco Gold and Diamonds CEO Suvankar Sen said, "Many people have done advance bookings of jewellery for the festive season. So, we are expecting similar sales levels in value terms as that of last year."
However, in volume terms there might be a 15-20 per cent decrease compared to that of last year, he said, adding that the company is expecting new online bookings on Thursday.
Bengaluru-based online jewellery brand Melorra Founder and CEO Saroja Yeramilli said: "We are seeing good demand for lightweight jewellery that we offer at an affordable range.
“We are expecting 30 per cent growth over last year's Dhanteras sales."
Digital gold platform Augmont director Sachin Kothari said the company saw around 45 per cent jump in demand compared to Dhanteras 2019.
"On an average, customers are buying in the range of Rs 3,000- 4,000. We are expecting this trend will remain the same throughout the festival," he added.
However IIM Ahemadabad's India Gold Policy Centre chairperson Arvind Sahay said that this year's Dhanteras sales would be better than what trade has been expecting.
"Very likely to see a greater shift to the investment market than jewellery, we are already seeing a good response for Sovereign Gold Bond and ETF.
“With decline in prices this week and with consumers with no avenues to spend otherwise are likely to open up their purse,” he said.
"Last year Dhanteras was down by 20-30 per cent, so it is likely that the volumes would still match the same as last year and price being higher year on year would help retain margin," he added.
Investment consulting firm Millwood Kane International founder and CEO Nish Bhat said, "The trend of gold buying during the festive season may continue but may not be comparable to the previous year's sales due to lockdown."
Photograph: Sivaram V/Reuters