Akshaya Tritiya 2016: Gold fails to glitter dampened by high prices

New Delhi: High gold prices dampened sales Monday on Akshaya Tritiya, considered auspicious to buy yellow metal, with a section of industry players putting the sales figure 20-30 percent lower than the year-ago level.

Indians are the world's biggest consumers of bullion and Akshaya Tritiya, along with Diwali and Dhanteras, is seen as one of the most propitious occasions to buy gold.

Gold prices have risen sharply in the last few days and are currently at Rs 30,100 per 10 grams in the national capital. The rates were at Rs 27,100 on Akshaya Tritiya in 2015.

"As of now, it looks sales are lower due to high prices and other disruptions like mandatory requirement of PAN card for transaction above Rs 2 lakh," Gitanjali Group Chairman and MD Mehul Choksi told PTI.

P C Jeweller Managing Director Balram Garg could not agree more. "In terms of volume, sales are flat. But in value terms, there is a growth of 10 percent due to high prices," Garg said.

"Jewellery sales are down 20-25 percent in the national capital as gold prices skyrocketed by 11 percent year-to-year," Delhi-based All India Sarafa Association Vice-President Surinder Kumar Jain said.

"Expectations of a dip in the precious metal prices in the global market too weighed on sentiment."

The Akshaya Tritiya sales have not been the same as the past year. There were less footfalls and demand from retail investors was also low due to high prices, a senior official from gold and silver refiner MMTC Pamp said.

Gold demand plunged 60 percent during the ongoing four-day gold festival organised by the state-owned MMTC on the occasion of Akshaya Tritiya, the official added.

In South India too, there was lacklustre demand for gold as the Madras Jewellery and Diamond Merchants Association said it expects a 25-30 percent drop in business in Tamil Nadu.

"Since there is election here, the model code of conduct prevents carrying large amount of cash. Compared to the last year, there are less footfalls and we expect at least 25-30 percent drop in business," the Association's President Jayanthilal Challani said.

The sales are still continuing and final figures are expected to filter in only tomorrow.

Jewellers are offering discounts to boost sales, but this time the response is "lukewarm".

However, All India Gems and Jewellery Trade Federation Chairman Sreedhar G V said painted a positive picture, saying jewellers expect 5-10 percent growth in sales today.

"We are getting positive reports from across the country, and the footfalls are also good... Southern region is extremely good while in the north, it seems to be similar as last year. Overall, we are expecting about 5-10 percent growth this Akshaya Tritiya," Sreedhar said.

According to him, the western region is also doing good as there is a preference for wedding jewellery as against bullion.

World Gold Council India MD Somasundaram PR felt that the buying behaviour of consumers is returning to normalcy following jewellers resuming business after a month-long protest over the proposed excise duty.

"Indians mark Akshaya Tritiya as an occasion to purchase gold and the initial feedback from the trade is an increase in demand where both wedding jewellery as well as investment products like coins and bars have done well," he added.

Kalyan Jewellers Director Rajesh Kalyanraman said, "It is too early to say as sales are going on. We expect 15 percent increase in sales today."