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Wild gold swings hit consumer demand, fox wedding planners |
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MUMBAI: Wild swings in gold recently have hit consumer demand, with jewellery buyers preferring to hold back on purchases despite just a few days being left before the wedding season concludes, leading jewellers and wholesalers have said.
"The wild fluctuation in price has kept consumers away ," Sandeep Kulhalli, vice-president, retail and marketing, Tanishq, told ET. "There's still around a week left before the wedding season closes and the inauspicious period of Shradh begins from December 15 to January 15, but there's been a clear slowdown in purchases. That's what we see across not just in our 169 stores but that's the sense across the industry ."
This was confirmed by Rajesh Mehta, executive chairman, Rajesh Exports, which has 80 stores in Karnataka and supplies bullion to dealers and jewellers. "There's been a definite slowdown in demand and nobody can deny that," Mehta said. Incidentally, the fall in demand coincides with the government having scrapped the so-called 80:20 scheme on November 28. This stipulated that an authorised agency or impor ter could supply four fifths of an inward shipment in the domestic market provided it supplied a fifth for exports.
On that day itself, the front-month gold contract on commodity bourse MCX, taking cues from prices in the in ternational market, swung by Rs 547 between the high and low, before closing down 2 per cent at Rs 26,172 per 10 gm. On Monday, a day after the Swiss voted 'No' to its central bank raising its gold holding, the contract closed up 3 per cent at Rs 26,939. From there the price fell intraday to Rs 26,605 on Thursday.
The high volatility, unseen in the counter for a long time, has unsettled buyers. Asked about demand at his 51 stores, mostly in south India, Joy Alukkas, chairman of the eponymous jewellery company, said, "Demand this month compares with that last year, not too good at present, but I think things will look up when the wedding season commences in Andhra Pradesh, Kerala and Tamil Nadu." Along with a drop in consumer demand, supplies too have slowed as importers of dore (raw gold) and gold bars await further clarity on licences under which they can import from the Directorate General of Foreign Rrade (DGFT) and RBI after the latter scrapped the 80:20 scheme.
Source : economictimes.indiatimes.com
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