India's post offices to sell discounted gold coins as festival nears
With the post offices in India focussing on sales of low-end denominated gold coins, the yellow metal continues to gain acceptance in far-flung areas as an investment vehicle.
Posted: Wednesday , 18 Apr 2012
MUMBAI (MINEWEB) -
India Post, the Indian government's postal department, is offering a 6% rebate on gold coins of various denominations for the forthcoming Akshaya Tritiya festival, which is one of the biggest gold buying festivals in the country. At present, gold coins are available at more than 800 post offices across India.
The rebate will ensure that even the most weary customer steps out to buy gold from the nearest post office. In 2010-11, gold coins worth 52 kilograms were sold at post offices across the country.
The word 'Akshaya' means imperishable or eternal. Initiations made or valuables bought on this day are considered to bring success or good fortune. Buying gold is a popular activity on Akshaya Tritiya in India, as it is the ultimate symbol of wealth and prosperity.
For small investors, the post office is an attractive option. Small investors tend to buy gold coins from the post office since the department focusses on low-end denominations like 0.5 gram, 1 gram, 5 gram and 8 gram. Traders said high sales were a sign that the yellow metal was gaining acceptance as an ideal investment in the world's biggest gold consuming nation.
Several jewellery houses across the country are also advertising heavily to bring in wary customers, since most of them have kept away from the gold market given the high price of the yellow metal.
To celebrate the festival of prosperity and good fortune, Tanishq, India's largest jewellery brand, is to offer a free gold coin with every jewellery purchase. For purchase of diamond jewellery worth $3,882 (Rs 200,000) and above, customers can also avail themselves of a flat 10% discount.
Commenting on the season special, Sandeep Kulhalli, vice president, Tanishq said, "Purchasing gold for Akshaya Tritiya is believed to bring about success and wealth. In sync with this joyous occasion, we have attractive discount offers that provide an opportunity to our customers to own exclusive Tanishq jewellery at better rates."
This year, the festival is to commence on April 24. Buying gold is an important aspect of the festival. The postal service is offering the rebate on gold coins of various denominations of 0.5 gram, 8 gram, 10 gram, 20 gram and 50 gram of 24 carat with 99.99% purity.
India Post, in association with the World Gold Council and Reliance Money Infrastructure, began selling gold coins made by Switzerland's Valcambi way back in 2008. Around half a tonne of gold was sold to over 55,000 customers in the initial two years.
According to the statistics provided by the postal department, the sale of gold coins has turned out to be a popular investment tool amongst small villagers. The state of Gujarat ranks fifth, while sales in Tamil Nadu and Kerala in the south have always been the highest.
Jewellers maintained that 25% uptick in gold business was expected this Akshaya Tritiya. "The consumer mood is upbeat despite the ruling high price. We expect sales to be 25% higher," said the All India Gems and Jewellery Trade Federation chairman Bachhraj Bamalwa.
He added that though jewellers add new stocks during the Akshaya Tritiya festival, "this year we are not building any new inventory till the government takes some positive steps and rolls back the hike in excise duty and customs duty proposed in the budget."
iPad Version: Picture - Wiener Philharmoniker gold coins are pictured at the Ginza Tanaka store in Tokyo: REUTERS/Yuriko Nakao