The Hindu Business Line : Akshaya Tritiya sales rush missing due to high gold prices

Bangalore, May 7 The rush for gold that one encountered during the Akshaya Tritiya period has been missing this year. With still a day to go, Akshaya Tritiya had a modest start with walk-ins being lukewarm till Wednesday evening (Akshaya Tritiya this year is spread over two days).

Jewellery retailers say sales have been steady — not stunning; the general mood and sentiment is a little low this year, given the high gold prices — although prices have more or less stabilised in the last few weeks or so. They hope the walk-ins to pick up on day two.

Says Mr Rajesh Mehta, Chairman, Rajesh Exports: “One can’t say Akshaya Tritiya is spectacular this year like, say, what it was two-three years ago. The overall trend is not very bullish.”

Mr Umesh Ganjam, Managing Director, Ganjam, says high gold prices and the stock market fluctuations may have had an effect on sentiments this year. But consumers buying more high value premium products this year will compensate for reduced walk-ins, says Mr Ganjam.

Tanishq expects a 20-30 per cent increase in sales during this period from last year (last year sales had gone up by 49 per cent from the previous year). Attributing this dip to high price, Mr Saumen Bhaumik, Head, National Retail, Tanishq, hopes the current stability in rates (gold is currently priced at around $870 per ounce; it had risen to $1,030 in March) will open up a window to buying. “Akshaya Tritiya this year is not as hot as the previous years. But then gold always goes through this cycle. While prices are high, consumer demand has not come down,” says Mr Bhaumik.

Forecasts

As for the forecast, there are a mixed views. While Mr Mehta believes prices will steadily come down eventually, Mr Bhaumik says forecasts suggest gold rates shooting to $1,200 by Diwali or even before. “But as long as there is propensity to buy, there will be confidence in jewellery. Gold is still a viable investment option,” says Mr Ganjam.

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