The All India Gem and Jewellery Domestic Council (GJC) predicts a 30 percent surge in retail sales this festive season, despite anticipation of a slowdown in gold exports because of weak demand from the US.
GJC Director Kamal Singhania has estimated retail sales to reach 120 tonnes during the festive season this year. "At least 30 percent higher gold jewellery sales are expected this year during the festive season as compared to last year," he told Moneycontrol in an interview on the sidelines of a press meet. He noted that retail sales of gold jewellery reached 92 tonnes last year.
The rise in demand comes despite an increase in gold prices, which are hovering at Rs 80,000 per 10 grams. "Due to the increase in gold prices, domestic demand has in fact increased as people’s attraction towards the yellow metal has risen," Singhania said.
The demand for gold has also been supported by global market trends, particularly the increasing focus of central banks on gold reserves. "All central banks, including the RBI, are buying gold because of dedollarisation. In BRICS, central banks are planning to keep 40 percent of reserves in gold. They are trying to hedge with gold," he said, underlining the strategic value of gold in international markets.
BRICS stands for a group of emerging market nations that represent about half of the world’s population and about a quarter of global GDP.
The Reserve Bank of India (RBI) has increased its gold reserves, which is part of the total forex reserves in 2024. In 2024, the RBI had brought home a little over 100 tonnes of its gold that was stored in the UK. A similar quantity of the metal may be added to its stock over the next few months for logistical reasons and diversified storage.
At the end of March 2024, the RBI had 822.1 tonnes of gold in reserves, out of which 413.8 tonnes were stored overseas. Central banks the world over have been buying gold in recent years amid economic uncertainties triggered by a troubled geopolitical situation.
Singhania also hailed the recent government measures, particularly the customs duty cut, for stabilising the prices. "Customs duty cut has helped lower the gold prices. Gold is currently at Rs 80,000, but without the duty cut, it would have been at Rs 90,000. Silver would have been at Rs 1.15 lakh without the custom duty cut, but is currently at Rs 1 lakh (per kilo)," he explained.
The GJC, which represents 3,500 retail jewellers across India, also bets on a combination of other factors such as pricing and the cultural significance of buying gold during festivals.
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