Indians charging up for tomorrow's gold buying festival frenzy
Traders are hoping for at least a 25% jump in gold buying tomorrow as consumers head to the shops on Akshaya Tritiya, considered one of the most auspicious days to buy the precious metal
Posted: Monday , 23 Apr 2012
MUMBAI (MINEWEB) -
The gold buying festival is on in India. Akshaya Tritiya, a day considered auspicious for buying the precious yellow metal has got both consumers and jewellers in a tizzy, with jewellers expecting a 25% increase in gold business in one single day and consumers scrambling to make up their mind over the varied discounts on offer.
Average gold sales during the last three years have been around 40 and 42 tonnes in one day. Akshaya Tritiya, which means `never diminishing', falls on April 24 this year, and is considered to be one of the four most auspicious days to bring the precious metal home. This year, in a run up to the festival, retailers are offering unheard of discounts and promotional offers to lure customers.
"We have had the three week strike against excise duties levied by the government in the Budget. We are leaving no stone unturned to ensure that the footfalls multiply tomorrow and that consumers can avail themselves of the choicest piece of jewellery or gold bar after the famine-like conditions that most have experienced,'' said Manish Jha, bullion trader in Mumbai.
Rahul Singh, marketing head of Shree Ganesh Jewellery House, exporters of handcrafted gold jewellery said the demand for gold jewellery and coins has already picked up. ``The long shutdown has compounded the consumer demand,'' he said.
Gold bought and worn on the day is believed to bring never-diminishing good fortune. Jewellers hope that business will pick up on Akshaya Tritiya after a fall in demand due to inflation and the recent strike. The practise of buying gold on a certain day has got jewellers keeping the stores open from early morning 4 am till midnight on that day.
"The consumer mood is upbeat despite the ruling high price. We expect business to soar and hope sales would be around 25% to 30% more than last year,'' said the All India Gems and Jewellery Trade Federation chairman, Bachhraj Bamalwa.
However, some traders said the high price of the yellow metal could keep some wary customers away. Last year, during Akshay Tritiya, the price of gold was $413.96 (Rs 21,700) per 10 grams. This year, it has already escalated to $542.16 (Rs 28,420) for 10 grams. This has led to several promotional schemes by gold retailers.
In Gujarat, buying assets like gold on the auspicious occasion has become extremely popular. Traders said around 250 kilo of gold is likely to be bought by Ahmedabad city alone in one day. The city of Bangalore too had business of approximately $57 million (Rs 3 billion) in just one day last year and traders said it would jump up by around 12%-15% this year.
"Gold has become dearer by 37% in a year. The current ruling price is $562.27 (Rs 29,500) per 10 gram. We hope and pray this phenomenal rise will not be a dampener and impact the demand for gold,'' said Sanjeev Shah, bullion trader in Ahmedabad.
He added that last year, a nose pin weighing around 10 miligrams was sold for around $3.62 (Rs 190). This year, its price has gone up to $5.71 (Rs 300). Similarly, a gold ring, weighing around 6 grams cost around $85.76 (Rs 4,500), but would cost around $123.87 (Rs 6,500) this year.
Though the gold price has jumped on an average by 22% as compared to last year, jewellers are expecting an uptick in demand.
Gold retail major Tanishq is offering a free gold coin with every jewellery purchase. For purchases of diamond jewellery worth $3816 (Rs 2,00,000) and above, customers get a flat 10% discount.
Diamond major Kirtilals has launched a scheme to secure the child's future through its Ayushmati-Diamond investment plan and Aanandham Gold Investment plan spanning a period of 15 months. The first instalment is absolutely free.
Kirtilals is also offering a free diamond pendant with the purchase of diamond jewellery worth $1906 (Rs 1,00,000), a free gold ring on the purchase of gold jewellery worth 80 grams, a free pendant on the purchase of 40 grams of gold jewellery and a free nose ring on the purchase of 20 grams of gold.
Targetting a 30% rise in sales, Orra jewellery brand is offering up to 25% discounts on the entire value of diamond jewellery and up to 50% on making charges on gold jewellery.
Another retailer, Joyalukkas, is offering a free gold coin with every $477 jewellery purchase. Customers have been invited to book their jewellery in advance and get a surprise gift on Tuesday, when they bring home the ornament.
Reliance Jewels is also offering double gold rate protection to enable a customer to shield his gold rate in the fluctuating market. Under the scheme, customers can pre-book their jewellery and shield their investment. Irrespective of a raise or dip in the price of gold on Akshaya Tritiya day, consumers can pay for the pre-booked amount and avail themselves of a massive discount. Invariably, prices shoot up on the auspicious day.
Reliance Jewels is the jewellery store from Reliance Retail. The company is also offering a discount on making charges on gold jewellery and up to a 100% discount on making charges on diamond jewellery.
Purchases are not limited to just physical bullion or intricate jewellery sets. Bullion trader Girish Patel said e-paper gold is also a big hit on the auspicious day.
"In the case of e-paper gold, last year around 2 tonnes of gold was bought with an investment value of around $95 million (Rs 5 billion). Gold ETFs are set to rocket in the country. This year too, we are expecting investment which will be many times last year's figure,'' said Patel.
Himanshu Vyapak, deputy CEO at Reliance Capital Asset Management Limited added that people have shown an interest in investing in gold ETFs rather than equity.
Incidentally, on April 24, the stock exchange has also decided to extend the live trading session in Gold Exchange Traded Funds securities from 4.30 pm to 8.00 pm.
The exchange has also decided to waive the transaction charges for all trades done in Gold ETF securities.