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Wedding gold purchase in Diwali causes discrepancy

Spot gold on MCX has risen by almost 22 per cent year-on-year to Rs 38,630 (ex-GST) this Dhanteras-Diwali.

, ET Bureau|
Oct 30, 2019, 07.56 AM IST
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Commodity Summary
MCX

GOLD
Mumbai: The discrepancy in sales figures between jewellers during this Dhanteras could be because of the clubbing of wedding sales with it by consumers in certain cases, given the 20 per cent jump in gold prices. While India Bullion & Jewellers Association (IBJA) estimates a 25 per cent volume drop in jewellery and bar and coin sales this year’s festivities, certain jewellers are claiming a 10-15 per cent yearon-year growth.

“The discrepancy could be put down to consumers clubbing wedding season sales with festive sales because of higher price point,” said Chirag Sheth, senior research consultant, Metals Focus, data provider to World Gold Council. “So, small jewellers and those catering largely for masses are reporting a drop in sales, while those catering for a wider clientele are claiming 10-15 per cent growth.”

Spot gold on MCX has risen by almost 22 per cent year-on-year to Rs 38,630 (ex-GST) this Dhanteras-Diwali. Adding the 3 per cent GST makes the price equal almost to Rs 40,000.
gold-graph

Sheth said that “overall” he expected sales to be flat to negative10 per cent this Dhanteras. This view gelled with that of jewellers from PN Gadgil & Sons whose CEO Amit Modak said his outlets managed to maintain volumes seen last year. They believe that those who have reported flat to low double digit growth are the ones who have sold wedding-related heavy gold and studded gold jewellery this Dhanteras, along with lighter jewellery and bars and coins. Leading organised player Kalyan Jewellers’ CMD TS Kalyanaraman said the company’s YoY double-digit revenue growth at Dhanteras was propelled by growth in studded jewellery and diamond segment and wedding season purchases.

Aditya Pethe, director, Waman Hari Pethe, said that sales growth at his 25 outlets were flat for the period from Navratri through Diwali, thanks to “robust” sales in the four days of Diwali. While IBJA pegs the Dhanteras demand for gold normally to be around 40 tonnes, they pegged this occasion’s sale to be 25 per cent lower because of higher price and people conserving on savings. Other trade officials estimate Dhanteras demand to account for 10-15 per cent of the December quarter jewellery and bar and coin sales.

In the fourth quarter last year (December quarter), Metals Focus reported jewellery and bar and coin demand at 236.5 tonnes. Going by certain industry estimates, Dhanteras would have accounted to 24-35 tonnes.

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