As the Hindu festival of Diwali approaches, the jewellery market in Delhi’s Lajpat Nagar is bustling with activity. Shops continue to operate on holidays, signaling high consumer interest. Current gold prices are around $1,440 for 10 grams, an increase that has had a noticeable impact on the demand for jewellery in India, the world’s second-largest market for gold.
Historically, Diwali and the preceding festival of Dhanteras are seen as auspicious times for purchasing precious metals, as many believe these items bring wealth and good fortune. Despite the rising prices, retailers report mixed customer responses. Some buyers, driven by fears of even higher prices, are purchasing more than they might have otherwise. Retailers such as Prakash Pahlajani of Kumar Jewels have noted an increase in customer traffic this year, even if the volume of purchases has changed.
Consumers are adapting by opting for lighter pieces, driven by the substantial increases in gold and silver prices of 60% and 70%, respectively. Jewellers are offering smaller weights, such as 250mg gold coins, to cater to those with tighter budgets. This shift reflects broader consumer trends, especially among younger buyers who prefer jewellery for everyday wear rather than special occasions.
Another significant trend is the growing interest in gold and silver as investments rather than merely decorative items. According to the World Gold Council, the proportion of India’s gold demand attributed to investment has risen from 19% to 35% compared to the previous year. Additionally, the Reserve Bank of India has been accumulating gold to diversify its foreign reserves, which further influences market dynamics.
Looking ahead, experts suggest that demand for gold and silver might continue to hold steady, especially among wealthier consumers, despite the challenges faced by lower-income families. Some potential buyers are delaying purchases in hopes of lower prices. Overall, the enduring cultural affinity for gold in India suggests that while immediate sales may fluctuate, long-term interest in the metal remains strong.
Source: https://www.bbc.com/news/articles/c3vnk3w0z69o?at_medium=RSS&at_campaign=rss