Bullion shines on Akshaya Tritiya; sales up 24% from pre-COVID levels

Unlike in the last two years, this time buoyant sales and mandatory hallmarking of gold have cheered up the small jewellers, who constitute the majority of the industry.

The rush to buy the yellow metal on Akshaya Tritiya day on Tuesday has put a smile on the face of jewellers, who were left high and dry in the last two years due to COVID-19.

Initial estimates by the industry indicate over a 20 percent increase in sales compared to the 2019 level. “We think sales are around 24 percent above the pre-Covid level. Fall in gold prices by Rs 4,000 per 10 gms in the last 10 days has also spurred the purchases,” said Surendra Mehta, National Secretary of the Indian Bullion and Jewellers Association (IBJA).

It is a tradition in the country to buy gold on Akshaya Tritiya day, as it is believed to bring prosperity and fortune. In the last couple of years, the pandemic had forced people to remain indoors. Though online sales thrived, it constituted only 15-20 percent of sales.

“Gold-buying as a tradition has been an integral part of Akshaya Tritiya. This, coupled with the ongoing wedding season, is expected to create a positive market sentiment. Though earlier Akshaya Tritiya was more of a South and East centric occasion, we are now seeing acceptance at a pan-India level. After two years of lockdown or partial lockdown, this year 100 percent of our showrooms are operational,” said Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers.

The time for buying gold on Akshaya Tritiya on Tuesday is from 7 a.m. to 9 p.m. Many jewellers witnessed a rush right from the morning. “People were queuing up to buy gold even before the shop opened. We are seeing demand for both jewellery and gold coins. Though the quantity purchased may be small, what is important is that people are buying,” said B Govindan, chairman of Bhima Jewellers.

Gold prices are up vis-à-vis last year. The spot gold rate is hovering around $1,854 per ounce today, compared to $1,835 on Akshaya Tritiya last year, and $1,715 in 2020.

“Gold purchases involve too many dynamics. Last year’s gold price may not matter. But the drop in prices in the last few days will have a positive impact,” said Ananthapadmanabhan, MD of GRT Jewellers.

The rate had crossed $2,000 per ounce after the Russia-Ukraine war started, and was ruling above $1,900 till the last week of April. “Higher dollar index and the expectation of a hike in the Federal Reserve rate this week have led to a slide in gold prices. But this may be short-lived, and gold prices may go up after the interest rate hike is announced,” Mehta said.

MCX June gold futures prices are hovering around Rs 51,700 per 10 gms, up Rs 4,000 from a year ago.

Jewellery purchases for marriages increased as weddings regained their earlier pomp and show, thanks to receding fears of the pandemic. “This year, we aspire to cater to a wider range of customers through a hybrid model, allowing patrons to invest in the yellow metal via both offline and online routes, such as digital gold and e-commerce,’’ Ramesh Kalyanaraman said.

Unlike in the last two years, this time buoyant sales and mandatory hallmarking of gold have cheered up the small jewellers, who constitute the majority of the industry. “In the last two years, the big jewellers could attract customers through online sales and discounts. However, this year, the small jewellers, who had suffered the most, could make good the loss to a great extent. This being the first Akshaya Tritiya after gold hallmarking was made mandatory, customers now have confidence in the quality of gold sold by even small jewellers,” said K Surendran, Secretary, All Kerala Gold and Silver Merchants Association.