What's holding back gold buyers this Diwali? Let's find out

With Diwali approaching, the price of gold is on the upswing, and many are wondering if its a good time to invest in the precious yellow metal. Gold prices have risen amid geopolitical tensions in the Middle East and speculation of the US Federal Reserve keeping interest rates high. Experts believe gold has shown a promising upturn post the Gaza-Israel conflict supported by robust domestic demand. Soaring prices take a toll on jewellery makers, business declines Jewellery companies and makers are rattled by the skyrocketing prices of gold and the drop in demand due to a sharp rise in gold prices during the festive season. Jewellery maker from Girgaon, Vikas Mirkars business is seeing an all-time low. We have been running the shop for more than 125 years. My father started this business and now I am running it. For the last two to three years, the gold business has suffered a lot. It is down by 20 to 50 per cent, he noted. Mirkar further said that earlier people invested in gold but now due to the rise in gold prices, they think twice before buying gold items. But he also acknowledged that the people do see it as an investment. Even though the gold market is struggling due to the rise in prices, we do see new jewellery shops open now and then. This shows that people still are buying gold, Mirkar said. Echoing similar sentiments, Nitin Karekar, who has been making jewellery for more than 45 years, said that buyers are confused about whether to buy gold or not due to the skyrocketing prices. People wait till the rates stablise or reduce after which they buy gold or gold items. With Diwali just around the corner, the business is still down. Nowadays, people tend to buy less gold and make lightweight items from it. For instance, earlier people used to buy 10 gram gold chain, now people want the gold in six or eight grams, he shared. The business was down before the Covid-19 pandemic, but now its affected more. Almost 15 years ago, the business was good, and now its down by 50 per cent. People are still buying gold but in lesser quantity and fewer items, Karekar said. Jewellery shop owners woo customers for Dhanteras amid upsurge in gold prices Shedding light on price rise, Sanjay Banka, CFO of Senco Gold & Diamonds, said, We know that Gold is considered as a safe haven in times of geopolitical uncertainty and forms a key part of peoples portfolios as it acts as a hedge against inflation and war. The festive season in India is also going to be accompanied by the wedding season coming up in November-December. Some customers expect that gold prices may increase further if the war continues so they are making their purchases now. We introduced Flexi Gold Rate plan customers at the beginning of October. If gold prices fall further on Dhanteras day, consumers would get to buy at the lower rate and if prices appreciate, they can avail of the lower locked-in gold price. We are seeing a good demand ahead of Dhanteras and footfalls at showrooms have been good driven by such consumer-friendly initiatives. At an industry level we are hopeful, that there will be growth of 10 to 12 per cent this Diwali compared to last year, Banka said. When asked if they are facing the brunt of inflated gold prices, Sanjay Banka said, West Bengal is a prominent jewellery manufacturing hub in east India, reputed for lightweight and handmade jewellery. The karigars of the state are skilled and known for their craftsmanship, and we have a strategic advantage in being headquartered in Kolkata with strong and established relationships with the artisans. Moreover, the funds raised from our IPO in July, have helped us stock up our showrooms with adequate inventory, and we are all geared up for a bumper Dhanteras. Ahead of Diwali, Senco Gold & Diamonds has introduced special offers for buyers. We have a host of special offers for our customers - up to 25 per cent off on making charges of gold jewellery; only rupee one making charge on diamond jewellery and up to 8 per cent off on diamond value for diamond jewellery. We have also launched an array of designs and jewellery pieces under the Shagun Collection which is under Senco Gold & Diamonds Vivaha 24 Collection, offering a range of exquisite pieces for all occasions, from contemporary lightweight to royal traditional designs ranging from Rs 50,000 to Rs 1,50,000. The Lotus Collection by Everlite is inspired by the motifs of Lotus with enamel and meenakari work signifying auspiciousness and prosperity and blessings of Goddess Laxmi for Dhanteras and Diwali. The Signature Collection was inspired by the Sencos logo created with motifs of swan and lotus, representing the serenity and blessings of Lakshmi Puja, Sanjay Banka added. Check gold prices Gold price declined Rs 350 to Rs 61,700 per 10 grams in the national capital on November 1 amid weak global cues, according to HDFC Securities. In the previous trade, the precious metal had closed at Rs 62,050 per 10 grams. Silver also tumbled Rs 1,200 to Rs 74,300 per kilogram. Meanwhile, the closing price for 999 purity gold was Rs 61,012 per 10 grams, while that of 999 purity silver was Rs 70,984 per kg, the data available on the India Bullion and Jewellers Associations (IBJA) website showed. In the international markets, both gold and silver were trading lower at USD 1,978 per ounce and USD 22.55 per ounce, respectively.

What's holding back gold buyers this Diwali? Let's find out

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