Dhanteras ends with a tear in the age of onions

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Sparks are missing in this year's Dhanteras as high gold prices coupled with a liquidity crisis have pushed down sales of gold and silver.

Gold jewellery sales are down almost 20% while silver demand has declined almost 40% though the price of the metal softened on Friday by 3% to. 49,500 per kg. Shoppers shied away from bigticket purchases while there was some movement in the midlevel category (up to. 75,000).

Jewellers and bullion traders attribute this drop to gold prices climbing to. 32,000 per 10 gm on Dhanteras day as the rupee dropped 36 paise to 61.86 against dollar in late morning trade. The investment demand for gold has dropped drastically, with coin and bar sales plummeting 80% on Dhanteras day, which is considered an auspicious day according to Hindu religion.

Haresh Soni, chairman of the All India Gem & Jewellery Trade Federation, told ET: "Jewellers are expecting some positive sales happening today after almost a lull of three months from July onwards. Though there has been some demand for jewellery, sales of gold bars and coin have dropped." Added Lalit Jagawat of Zaveri Bazar-based Nakoda Bullion: "Since morning, there have been hardly any sales in bars and coins. For me it is a very lacklustre Dhanteras." Rajiv Popley of Popley & Sons said generally wedding orders are placed on Dhanteras day.

Demand Less than Last Year

"But this time, we have not seen wedding orders being placed. People who have placed orders earlier are taking delivery today," said Popley. The demand is comparatively less than last year's Dhanteras." Sales of gold have also fallen in the National Capital Region (NCR). "Since the onset of Navratri, sales of gold and silver jewellery have failed to gain momentum. And the trend remained the same on Dhanteras day too.

In NCR, gold sales have dropped at least 20%," said Satish Chand Singhvi, president, Delhi Jewellers Association. However, diamond jewellery witnessed some movement mostly in the western part of the country. Vijaya Jain, CEO, Orra, said, "In value terms, we are expecting a 20-25 % growth this Dhanteras vis-a-vis the last. The products that are easily flying off the shelf are pendants, earrings and bangles. Sentiment continues to be negative as there is slowdown all over and the jewellery movement is slow." Price-sensitive eastern India has also followed the national trend. Suvankar Sen, managing director of Senco Gold, said demand is down 20%.

"Though there is willingness among customers to buy gold jewellery, they are constrained by budget. Wedding season buying is not happening." The smaller neighbourhood jewellers have been worst affected this Dhanteras . Vijay Singh, owner of Ludhiana-based Arti Jewellers, said generally small-time buyers who can invest up to Rs 15,000 in Dhanteras come to his shop.

"But this time, they are not coming as they know they will able to get lesser volume of gold with this money," he said. South India, which is a large buyer of gold and silver, has also seen demand dropping. "Chennai is a big silver market, but pre-Diwali demand has dropped 40%," said TM Srinivasalu , a leading silver merchant .

South India contributes more than 40% of India's gold consumption, which generally hovers at 900-950 tonnes. Siddharth Mehta, chief strategist at Rajesh Exports that runs 82 retail outlets in Karnataka, said, "There has been a drop of 20% in sales this Dhanteras." His views were also echoed by Amzad Hussain, marketing manager of Kerala-based Malabar Gold and Diamonds.


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Keywords: Dhanteras , gold,silver,Gold jewellery , traders , dollar, investment demand , coin , All India Gem , Jewellery Trade,gold bars , wedding orders ,National Capital Region ,NCR, Navratri,silver jewellery, Delhi Jewellers Association, diamond jewellery,pendants, earrings ,bangles,customers,gold jewellery,Wedding season, Exports ,Business news