Gold glitters, but lighter: Record prices fail to dim Dhanteras glow

Copyright © HT Digital Streams Limited All rights reserved. Gold prices in India have climbed 66% this year. (Hemant Mishra/Mint) Summary High gold prices did not deter buyers this Dhanteras. They used the opportunity to buy more investment-grade gold and silver, including bars and coins, of much higher purity. New Delhi: Undeterred by the record high prices of these precious metals, Indians turned up in droves at jewelery stores on Saturday to buy gold and silver, keeping the Dhanteras tradition alive. However, total gold order volumes fell 10–15% from a year ago, even as sales value rose sharply, according to the All India Gem and Jewelery Domestic Council (GJC). Still, festive purchases are expected to cross ₹ 50,000 crore by Sunday evening, he added. Dhanteras, which marks the first day of Diwali, is an auspicious occasion when Indians usually buy silver or gold. While Diwali will be celebrated on Monday, wedding-related gold purchases have also begun. “Sentiment is strong despite high prices,” says Rajesh Rokde, chairman of GJC. “Consumers are buying strategically—gold coins are leading demand, and signature certified lightweight jewelery is doing well. Silver items, particularly coins and puja items, have risen nearly 40% over last year. Silver is no longer a secondary choice, but a smart, festive investment for value-conscious shoppers,” he added. According to industry experts, consumers mostly bought gold and silver with a lower gram size to mark the annual tradition. In Delhi’s Lajpat Nagar market, silver shops opened earlier than usual with shoppers making a beeline to buy small coins, chains and idols of deities. “While some consumers are opting for smaller quantities or lower gram weight in gold and higher on silver due to price considerations, the overall invoice value has seen a marked increase,” said Samit Guha, MD & CEO of MMTC-PAMP India Pvt. Ltd, which sells gold and silver coins and bars. “While cautious buyers are opting for lower carats (K, a degree of purity), overall demand remains strong and continues to show year-over-year growth.” In terms of grammage, silver sales were slightly higher than gold, while gold sales were stronger at lower weights, Guha added. “Overall, we saw approximately twice the billing value this year compared to last year, reflecting strong consumer preference for our premium 24K gold and pure silver minted coins and bars at 999.9+ purity.” Key Takeaways Gold prices in India have risen by around 66% this year, but Dhanteras sales by value are expected to cross ₹50,000 crore, although order volumes are down 10-15% from last year. This Dhanteras, consumers preferred gold coins, signature certified lightweight jewelry and silver items, with silver sales up nearly 40% year-on-year as buyers adjusted to high gold costs. Schemes such as Tanishq’s zero-deduction gold exchange and increased first-time buyers at Kalyan Jewelers indicate strong sentiment, with overall invoice values ​​nearly doubling over last year at leading retailers. Rising prices International gold prices have risen by 58% this year (as of October 17, Friday), which is the sharpest annual increase in 45 years, according to the World Gold Council (WGC). In September, gold prices rose 11.6%, followed by another jump of 7.9% in the first two weeks of October – breaking past the $4,000-per-ounce mark for the first time ever, the board said in a statement on Friday. Gold prices in India have mirrored this trajectory, climbing 66% year-to-date. On Friday, the price of 24 carat gold (the purest form) was around ₹1,32,953 per 10 grams in Delhi, while that of 22 carat gold was around ₹1,21,883 per 10 grams. But strong investment-led demand for gold more than offset the slowdown in sales volume, according to WGC. Indians are also buying gold for the peak wedding season, which typically runs from November to February, although consumers are opting for lower-carat (lower weight) pieces, affecting overall retail volumes, the World Gold Council said. India’s consumption of gold jewelery in tonnes fell 17% year-on-year in the April-June quarter, per WGC; globally it fell by 14%. Meanwhile, demand for gold bars and coins increased 7% year over year during the three months—the eighth consecutive quarter of growth. But here too—the impact on affordability was reflected in the growing demand for coins weighing less than 10 grams. Exchange offers and buybacks Gold and silver shops offer various incentives to capitalize on India’s festive season tradition. Last month, Titan Co. ‘s flagship jewelery chain, Tanishq, launched a campaign offering ‘0% discount’ on all gold categories, even as low as 9 carat, as part of its old gold exchange programme. “Despite record high gold prices, we are seeing renewed enthusiasm this festive season. Consumers are viewing price volatility as a strategic opportunity to reinvest – either through gold coins or by upgrading their existing jewellery,” said Ajoy Chawla, CEO, Jewelery Division, Titan. “Our ‘Zero Deduction Gold Exchange Programme’ has seen a sharp rise in traction, with its contribution increasing from the usual 35-36% to 38-40% since Navratri (September 22-October 2),” he added. “Overall growth is driven by higher ticket values, while buyer growth remains in early single digits.” While multi-outlet jewelry stores are seeing a preference for lighter jewelry, high-end independent stores catering to weddings are experiencing strong sales with minimal impact on volume. In contrast, smaller shops are struggling, the World Gold Council said. “Our festive pre-booking offer has seen encouraging participation. Notably, around 40% of buyers this season are first-time customers, indicating strong demand and renewed enthusiasm among buyers,” said Ramesh Kalyanaraman, executive director, Kalyan Jewelers Ltd. said. sets are seeing renewed interest, reflecting a growing aspiration among consumers,” he added. Sachin Jain, managing director, World Gold Council, said sentiment for gold jewellery, coins, bars, exchange-traded funds and digital gold remains positive. “Customers are making token purchases and heavy pieces are also being bought. Due to record number of price hikes, the industry has also passed on certain benefits to their consumers by offering healthy discounts,” Jain said. “Overall, we expect gold buying interest to remain strong through the current festive season and the upcoming wedding period.” Get all the industry news, banking news and updates on Live Mint. Download the Mint News app to get daily market updates. more topics #GoldPrices #Wêreldgoudraad #dhanteras Read next story