A drop of 4.5% in gold prices over three weeks, from a peak of INR 74,222 per 10 gm, has invigorated consumer confidence. Mumbai’s Zaveri Bazaar, Asia’s largest gold market, is bustling with activity. Jewellers like Joyalukkas, Senco Gold & Diamonds, PNG Jewellers, Kama Jewelry, and more are witnessing a surge in foot traffic and demand, up by 10-15% compared to two months prior.
Election Model Code Lift Boosts Market
The decline in prices has encouraged some consumers to purchase gold bars and coins. Additionally, the lifting of the election model code of conduct, which was in place since the start of April, has enticed consumers back to the market, as they are now able to carry more cash beyond INR 50,000 and make jewellery purchases.
The Model Code of Conduct (MCC) prohibits carrying cash exceeding INR 50,000, as well as new items worth more than INR 50,000, without supporting documents.
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Kumar Jain, proprietor of Umedmal Tilokchand Zaveri based in Zaveri Bazaar, remarked, “The atmosphere is optimistic not only here but across the country. Jewellers are replenishing their stocks with new items, and customers are actively purchasing gold. In the weeks ahead, we anticipate a further increase in sales.”
Current Gold Price Status
As of Tuesday, the price of gold was approximately INR 70,900 per 10 gm.
Saurabh Gadgil, managing director of Pune-based PNG Jewellers, expressed, “We’ve experienced increased foot traffic thanks to the price decrease and the establishment of a stable central government. Additionally, the relaxation on cash limits for purchasing jewellery has contributed positively. The previous constraints on cash movement, which dampened demand since April, have been alleviated. We’ve observed a 15% rise in demand.”
The decline in the price of gold was attributed to profit-taking, especially following the release of the Federal Reserve meeting minutes. These minutes suggested a lack of confidence among policymakers regarding the likelihood of immediate interest rate cuts.
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The decrease in prices has also spurred families planning weddings later in the year to purchase jewellery. Suvankar Sen, managing director of Senco Gold & Diamonds, remarked, “The decline in gold prices has motivated customers to revisit our stores and commence their wedding shopping. Concerned about potential price increases, they’re opting to buy gold ahead of time. Demand has surged by 15% in the past week alone.”
Baby George, CEO of the jewellery retail chain Joyalukkas, reported a 10-15% rise in sales across their stores in India. He attributed this increase primarily to the softening of gold prices.
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