Mixed response for gold rush on Akshaya Tritaya

Following weaker rupee that has made imported bullion more expensive, the Indian gold market has witnessed lacklusture Akshaya Tritaya this season in terms of customers footfalls, and demand from retail investors as well, when compared to the previous corresponding period.

This is despite the ongoing wedding season which too has failed to uplift gold buying sentiments, mainly owing to hike in prices of gold from Rs 22,000 last year per 10 gms for 22 carat to Rs 28,000 per 10 gms for 22 carat this fiscal, following recent Union Budget announcement of hike in import duty on gold to curb more imports of gold.

Usually, it is also during the Akshaya Tritaya and the wedding season when the Indian market for precious metals like gold and silver shapes up according to the religious sentiments of the consumers. Importantly, festivals play a vital role in purchases, as it is most auspicious to buy gold on such occasions.

However, industry experts opine that the traditional gold jewellery sales has definitely been less this Akshaya Tritaya. For instance, when TSI Web team visited organised traditional branded jewellers showrooms of  Tribhovandas Bhimji Zaveri, (TBZ), Popley & Sons based in Mumbai, there were hardly any customers footfalls. The sales team at the showroom admitted that they are witnessing drastic dip in customers footfalls and actual gold jewellery sales conversion at their showrooms during this Akshaya Tritaya, over the corresponding period.

A change in trend has been seen in the gold ETF's market. Tuesday recorded a traded value of Rs 608 crore in Gold ETF's, registering a 44% increase, as compared to Rs 423.05 crore worth trade executed during the previous Akshaya Tritiya.

When contacted, Mukesh Kothari, director, Riddi Siddhi Bullion Ltd (RSBL) told TSI Web, “This season has definitely been weaker than the other ones. There was almost a 25% to 30% drop in sales volumes as higher prices of gold prompted consumers to buy lesser quantities compared to the corresponding period.”

Kothari added, “We have seen a shift in demand from traditional jewellery to Gold ETF's. Though people do buy jewellery as a tradition during the marriage season. Else from the investor's point of view we see more and more people buying Gold ETF's.”

In order to keep the gold buying sentiments upbeat this Akshay Tritiya, RSBL has launched India's first ever online portal www.bullionone.com, dedicated solely towards selling gold, silver and platinum coins and bars.

These bars and coins are being sold at wholesale 'bazaar' rates on the website. RSBL, a leader in the bullion industry, has set benchmark prices in the bullion market. Hence prices on www.bullionone.com are at least 5% cheaper than other websites and banks.

For retail investors, www.bullionone.com is meant to become the first avenue to purchase silver and platinum coins online. RSBL provides convenience of shopping to the registered members by offering cash on delivery option on ordering upto the value of Rs 5,000. Payments can be made through debit/credit card or net banking. The website would also flash a window wherein a buyer can compare the rates with the ongoing market prices.

RSBL's online gold retailing portal deals with about 2,000 clients, including branded gold jeweller retailers such as Tanishq, TBZ, Popley & Sons, among others.

According to Samir Shah, Vice President, RSBL, “These gold retailers have witnessed about 30% dip in gold retailing online during this Akshaya Tritaya on our platform. In fact, the demand from the gold retail investors was at par with last year's demand. Value wise the demand was same, but volume wise, we witnessed less demand. We sold 30 kg gold during last Akshaya Tritaya through online portal. However, during this Akshaya Tritaya, we have witnessed only about 20% gold been sold online.”

Actually, even gold imports have come to an almost complete halt on high prices after a duty hike, although a three-week long strike to protest the increase was called off after the finance minister promised action early next month. As per the World Gold Council data, the country's jewellery demand last year stood at 567.4 tonnes, against investment demand of 366 tonnes.