Gold fails to glitter on India wedding season

March 06, 2009

Commodity Online
MUMBAI/NEW DELHI: In normal circumstances, jewelleries across India celebrate the wedding season with increased sales and better revenues of gold. But, in 2009, the year of recession, jewelers have hardly anything to cheer about.

Sales are down across the country and a gloomy scene is witnessed in every jewellery shop in Kerala, Mumbai and in the national capital.

In fact jewellery shops now wear deserted look. Moreover, customers are now coming to the shops to sell old gold rather than buying. Again, a few customers who still come to the shops are buying lesser quantity of the yellow metal compared to previous marriage seasons.

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At a time when gold prices are soaring above Rs 15,000 per 10 gm, people find it tough to buy the yellow metal. "Gold sales have come down drastically. Generally, families in India begin the shopping for gold jewellery from March first week, as April and May are wedding season. But this year, there are hardly any families coming to buy gold jewellery," said Ashish Malhotra, owner of A M Jewellers in Mumbai's Zaveri Bazaar.

Instead of buying gold at these high prices, Malhotra says most of the gifts at weddings these days are silver ornaments or very small gold items.

Another situation is that people are now gifting old ornaments to their daughters on the occasion of wedding instead of buying new ones.

With people’s purchasing power going down drastically due to the impact of global meltdown, less sales are reported from jewelleries.

Jewellers said many of the customers these days are those who turn up with old ornaments for their replacement with new ones.

Also, most of the buyers these days purchase fresh jewellery for their children. The practice of gifting gold items to relatives and friends seems to be on decline.

The demand for gold has gone down by over 40% and with gold price still hovering over Rs 15,000 per 10 grams, the business is unlikely to better in near future.

In the nothern India state of Bihar, at least 250 kg of gold used to be sold one marriage season earlier, but this marriage season the sales would hardly total 100 kg.

Traders say the situation could improve only if prices go southward between Rs 13,000 and Rs 14,000 for 10 grams.

Meanwhile, the abrupt rise in prices of gold has led to popularity of some innovative light-weight jewellery items made of hollow tubes and multi-colour semi-precious stones. 

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