This Akshaya Tritiya appeared to be pale as high gold prices and inflationary pressure pulled demand in terms of volume or weight down by 20 per cent when compared with last year, according to market players. Still jewellers felt content that at least they matched last year’s sales in value terms.
They witnessed strong demand for lightweight jewellery as the yellow metal turned 18 per cent costlier over the past year.
Demand in south India remained strong, but there was weakness in northern and western India, according to Surendra Mehta, national secretary, Indian Bullion and Jewellers Association.
Some jewellers said last year’s demand was “exceptional”, following a near washout in the pandemic-affected years of 2020 and 2021.
Chirag Sheth, principal consultant, Metal Focus, said: "A high gold price of around Rs 60,000 per 10 gram was a big hurdle for gold demand, and even Akshaya Tritiya, one of the biggest occasions for gold purchases, witnessed the impact. Inflationary pressure is forcing customers to stay away from non-essential purchases, such as gold."
Although no official demand projection for Akshaya Tritiya was available, market observers said average demand during this auspicious day, in the medium term, is estimated at 15-20 tonnes. They said last year’s demand was “very good” but this year again it fell to the medium-term average.
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According to PwC’s latest Global Consumer Insights Pulse Survey for India, "63 per cent of Indian consumers are cutting back non-essential spending altogether.” The survey also said most Indian consumers were looking to reduce their expenditure across all surveyed categories over the next six months, a significant decline in planned spending across all categories since the previous pulse survey in June 2022. “Industries, including luxury and premium products, travel, and fashion, expect to see the greatest portion of consumer spend reductions over the next six months, whereas the groceries segment is expected to decline the least,” it said. Gold is part of the list of expenses witnessing a spending cut.
Besides, Mehta said, “This year there was no wedding mahurat & celebration on Akshay Tritiya due to 'Guru Ast'.”
Prithviraj Kothari, CEO & MD of Riddisiddhi Bullions, said: "After a cumulative rate hike of 500 basis points by the US Federal Reserve over the past year, the risk of crises or a recession has risen. Amid crises, gold and silver have historically outperformed other asset classes and have given double-digit returns.”
Investors who had bought gold last Akshaya Tritiya witnessed an 18 per cent return this festival -- the highest in the past three years. Savings interest rates are around 8 per cent, Kothari pointed out.
He further said: “Consumers took deliveries of gold booked earlier on Akshaya Tritiya, and several customers, who invested in monthly gold schemes, took gold delivery of this day after their plans matured recently."
Despite high prices and lower volume, most jewellers were happy to match last year’s sales figure in rupee terms; they expected even poorer demand. Saiyam Mehra, Chairman of All India Gem and Jewellery Domestic Council, said: “We saw a great demand for lightweight jewellery as consumers preferred to celebrate Akshaya Tritiya without burning a hole in their pockets. High prices this season could not affect overall sentiment this year.”