Festive hopes fade for India's gold industry after surge in price
A rebound in gold prices to a record peak has dashed the Indian bullion industry's expectations of a lucrative festival season after their hopes were boosted by a deep cut in import duty two months ago to the lowest in a decade.
"Everyone was feeling positive about demand after the duty cut since we were seeing a spike in interest, and it really made us think the festival season would be amazing," Prithviraj Kothari, president of the India Bullion and Jewellers Association (IBJA), said.
"But with prices bouncing back right before the festivals, demand might end up being 20 per cent lower than usual in terms of volume."
The festive season in India, the world's biggest gold consumer after China, traditionally has been the time when people buy the most gold. It is considered auspicious as a present at weddings and during festivals such as Diwali and Dussehra. This year, Dussehra is on Oct. 12, and Diwali will be celebrated in late October.
Kothari said buying habits were shifting, with consumers spreading their purchases throughout the year and focusing on price rather than waiting for special occasions.
Since last year's festive season, prices have risen by more than a quarter. Consumers' spending power has not kept pace, Amit Modak, chief executive of PN Gadgil and Sons, a Pune-based jeweller, said.
Source: https://www.business-standard.com