Demand for gold in India to grow as festival seasons begins
MDT/PTI 05 November 2012

Volume the jewellery demand is likely to be bit muted this Diwali as people are going for other options such as coins, bars and ETFs

Mumbai: With the festival of Diwali along with marriage season around the corner, leading jewellers and bankers hope that the gold sale in India will grow during the festive season, reports PTI.

 

Prominent jewellery groups and bankers expressed hope that gold price volatility is unlikely to check the jewellery demand and a remarkable sale would be registered during this year's `Dhanteras' (a day in Hindu calendar considered auspicious for gold-buying).

 

"We expect the sales to grow by 35-40% this Dhanteras. The peak marriage season is immediately after Diwali," Mehul Choksi, chairman and managing director of Gitanjali Group told PTI.

 

However, in volume terms the growth is expected to be just 10%, as people will go more for light weight jewellery, he said, adding that demand for coins is very strong and has grown 35-40% year-on-year.

 

Shree Ganesh jewellery House head, marketing, Rahul Singh echoed the same growth estimate.

 

"With rising prices, light weight jewellery is in demand. People are buying gold jewellery for the upcoming festive and the wedding seasons, anticipating future rise in price. The purchase of gold coins is growing rapidly," he said.

 

Gold price on weekend was ruling at Rs30,480 per 10 grams on MCX and globally it was at $1,677 an ounce (28.34 grams).

 

This festive season the demand will pick up because usually, as prices go up the demand rises, World Gold Council Director, Investment, Amresh Achrya said.

 

Discounts by jewellers would fuel the demand, he added.

 

Kotak Mahindra Bank Executive Vice President Puneet Kapoor said last Diwali the bank sold 125 kgs of gold coins.

 

"This year we are expecting at least 20% growth," he said, adding that uptake would mostly be for 5, 8 and 20 gms category.

 

"As an investment, the yellow metal continues to command long term value, a tag for being a safe haven, hedge against inflation and asset allocation, etc," he said.

 

Angel Broking's head, commodities Naveen Mathur said the gold prices are likely to rule at around Rs35,500-31,000 level during the festive season. "The demand will be there for jewellery as people realise that gold will not go back to the previous year's level," he added.

 

However, in volume the jewellery demand will be a bit muted as people have options such as coins, bars and electronic traded funds (ETFs), he added.

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