Consumers shying away from gold this DiwaliOctober 24th, 2008 - 12:16 pm ICT by IANS
New Delhi, Oct 24 (IANS) Diwali is the time when most people shop for gold and stores reap rich profits, but this year rising gold prices and high levels of inflation have kept buyers away.Sale of gold jewellery has not been bad, but it has not been as robust as in other years, forcing retailers to wait for Dhanteras, two days before Diwali when people traditionally buy gold and utensils.
“Though customers do indulge in festive shopping, the volume of sales have gone down,” Mehul Choksi, chairman and managing director of Gitanjali group that deals in brands such as Nakshatra, D’damas, Gili and De Beers, told IANS.
Echoing similar sentiments, Harish Bakshi, senior manager in charge of sales and promotion at Ashwani Kumar’s Mehrasons Jewellers, told IANS: “An overall decline of 20-30 percent in terms of sale of gold jewellery cannot be ruled out.”
The rate of the yellow metal is fluctuating between Rs.12,400 and Rs.15,500 per 10 grams at the moment, unlike last year when the price was close to Rs.10,100 around Diwali time.
Inflation, too, has played havoc with a jump in rate.
However, World Gold Council associate director Keyur Shah said inflation is not the sole reason for the plummeting sale of gold jewellery, adding that buying gold jewellery is usually a “planned purchase and people save money for it for months together”.
According to Sandeep Kulhali, vice president at Tanishq, the Tata Group’s jewellery division, said August saw a rise in sales, and people are now avoiding spending on gold yet again around Diwali.
K.C. Jain, partner at KK Jewellers, cited other reasons. “Share market crash, overall collapse of the economy, rising price of gold and high inflation rates have limited purchasing power, and people have become more conscious,” he said.
“It has become so difficult to touch gold now,” said Neelam Sharma, a homemaker who used to buy gold each year on Diwali but is refraining from doing the same this year.
“I keep a check on the rate of gold before I go out shopping for jewellery since I want to get a good deal and not shell out all my savings,” affirmed Mansi Dhar, who is a trainer with a business process outsourcing firm.
Alongside, a shift of preference from gold to diamond has also gained momentum in recent times, challenging the position of the yellow metal as an investment route.
“Diamonds have become more popular among women from all walks of life, especially working women as the stone exudes a lot of class,” Kulhali of Tanishq told IANS over phone from Mumbai.
Tanishq entails a range in diamond jewellery called “The Everyday Collection”, specially designed for working women.
“It complements both western and Indian wear, which turns out to be more economical as one doesn’t have to purchase different kinds of jewellery for different outfits,” stated Vrinda Rai, working with a leading Bank.