Mumbai: With gold prices tumbling to a 15-month low Monday, retailers are witnessing a surge in demand and expect up to 50 percent spike in sales volume in this marriage season.
They are also expecting prices to fall further to around Rs 25,000 per 10 grams in the immediate short-term.
"Over the weekend, demand has picked up and there is surge in footfalls. As such, demand for jewellery has been up since Holi due to the upcoming wedding season. However, the recent plunge in prices have added to the momentum.
"We are expecting a whopping 50 percent growth in sales volume during this season over the same period last year," Vice-Chairman of the Mumbai Jewellers Association Kumar Jain said.
Jain, who also owns Umedmal Tilokchand Zaveri retail chain, said jewellers are expecting a good season on the back of expectations that the prices are likely to tumble further to around Rs 25,000 due to global cues.
Prices in Mumbai Spot market today was ruling at Rs 26,550 per 10 grams compared to Rs 28,410 in the same period last year.
Echoing a similar view, Delhi-based PCJ Jewellers Managing Director Balrram Garg said the demand for jewellery has grown during the last two-three days as gold prices started declining.
"We are expecting 30-40 percent sales growth, both in value as well as volume terms, during this season," he said, adding that the prices may decline by another 2-3 percent.
Tribhovandas Bhimji Zaveri Chief Executive Prem Hinduja said there has been a positive change in the attitude of buyers with growing footfalls in all stores.
"Historically, we have always seen that whenever there has been a decline in gold prices, jewellery demand has increased even during the inauspicious periods. And the present trend is not different. However, it is too early to give any figures," he added.
However, Gitanjali Gems CMD Mehul Choksi feels that people are still waiting for prices to go down further before going in for any heavy purchase.
"It was a good weekend. As it is the demand was already there for the wedding season. However, for any additional purchase, people are still waiting for the prices to decline further. Currently, we are seeing more preference for diamonds and not gold," he said.
If prices continue to remain weak, there is likely to be up to 15 percent growth in demand, he added.
Bombay Bullion Association President Mohit Khamboj said wedding demand will always remain even if prices are high. "If gold prices continue to decline there is likely to be up to 40 percent rise in sales. However, it is still early days to comment as people are looking for more price decline," he said.
The government had hiked the import duty on gold and platinum to 6 percent from earlier 4 percent in February to discourage imports with a view to check the widening current account deficit.