Mark your dates for 4th Asia Pacific Precious Metals Conference on 07-09 June 2020 at Mandarin Orchard, Singapore..., Mark your dates for 17th India International Gold Convention on 03-05 Sept 2020 at Radisson Blu Resort & Spa, Udaipur...
 You are here : Home > Expert Column
 
 

2019 Dhanteras / Diwali Sentiments

Bullion Bulletin did a small survey to capture the sentiments on the eve of Dhanteras / Diwali 2019. Below is a summary.

1.     How was the demand for gold this Dhanteras / Diwali season? When it comes to consumer buying, what is different this time compared to last Diwali (2018)?

“This festive season, the demand for gold has been very low. Jewellers are offering deep discounts to generate demand and increase sales. However, in light of general economy slowdown, there isn’t any demand growth expected this year. Bullion dealers are waiting for gold prices to stabilize/reduce”, Mr. Ketan Kothari, Augmont Enterprises Private Limited

As a manufacturer, demand for jewellery this Dhanteras is down by 30 to 40%. Retail sale is also not great, lower by 40%, as per Mr. Srinivasan, Emerald Jewels

“Demand on specific festival day i.e. Ghatsthapana, Dashehra, Dhanteras, Diwali Pratipada (Padwa) sale was good but as a season of 30 days starting from Ghatsthapana to Diwali overall it was slow to the extent of 20% as compared to 2018. Customers were not in mood to spend liberally, as there was an overall slowdown, coupled with a 15% rise in gold price”, Mr. Amit Modak, P. N. Gadgil & Sons Ltd.

 

“Bullion demand has been very low as compared to last year. Gold Coin demand almost 40% less than last year. Silver coin did little better but still as compared to last year is down by 10%” Mr. Vipin Raina, MMTC Pamp.

“This year demand near Diwali was good but value of goods purchased by customers was less as they purchased small denominations gold & silver coins. As far as our Company's products are concerned, we have reduced production to some extent as compared to last year and as such we exhausted all our products. This year customers preferred lesser value products as compared to last year.” Mr. Vidit Garg, Kundan Group

“The demand this dhanteras was so low not just compared to last year but overall. This could be due to various factors, like the ongoing slowdown in our economy leading to severe liquidity crunch in the market, spike in price of gold by around 18-20 % compared to last year, and also increase in custom duty to 12.5% from 10.3%. It is also said that smuggled gold is 5 to 6 % cheaper in the market, further affecting organised players.” Mr. Ankit Jain, dP GOLD.

Mr. Prashant Mehta, Rajesh Exports, “The general demand of gold has only decreased. Dhanteras this year observed a decrease of demand up to 40%”.

 

2.     Did high gold prices affect quantity purchased? Are customers in your city / region seen to be moving towards lower caratage (say from 22 carat to 18 carat and so on)?

 

Yes, gold price is the main reason and other problem is economic slow down according to Mr. Srinivasan, Emerald Jewels

Mr. Ketan Kothari, Augmont Gold Private Limited said that due to price rise, customers are definitely having second thought about gold ornaments. Customer preference is shifting from traditional heavy weight jewellery to light weight jewellery in 22k along with shift from 22k to 18k. This shift is mainly for setting aside price rise effect, he added.

Mr. Vidit Garg, Kundan Group said that high gold prices definitely affected the purchase by the customers. Most of the customers followed a wait and watch policy. However, as on the day of Dhanteras; good sale was made. Also due to high prices of gold, customers preferred lower carats of jewellery, adorned with Sarwoski zirconia. This was an advantage for Kundan, as it manufactures 18KT and 22KT fine gold jewellery.

Mr. Bhargava Vaidya, B N Vaidya Associates added that general public is loyal Dhanteras shopper.  

Mr. Prashant Mehta, Rajesh Exports, said that sudden hike in gold prices a couple of months ago lead to deferring of purchases by customers as customers wait for prices to come down. In his opinion, customers are not moving to lower carat as Indian customer is always a 22K buyer.

 

3. How was the demand for silver in your city or region? What are the typical purchase items when it comes to silver?

 

Mr. Ketan Kothari, Augmont Gold Private Limited said that silver demand has been far better this Dhanteras and Diwali with demand rising from 12% to 15% in comparison to last year. The demand is observed in the category of Silver coins, idols & silverware. However, Mr. Srinivasan, Emerald Jewels felt that silver sale is almost the same as that of last year, mostly Silver idols. Mr. Vidit Garg, Kundan Group mentioned that the demand for silver coins embossed with Ganesh - Lakshmi was robust.

Mr. Amit Modak, P. N. Gadgil & Sons Ltd said that positive price movement in silver after two years has attracted customers to silver as compared to 2017 and 2018. At present, there is a good demand for silverware for individual use and coins and bars as investment, according to Mr. Amit. Mr. Vipin Raina, MMTC Pamp added that silver demand has been good since last months or so, although it’s down from last year but still better than gold.

 

4.     Platinum is a deep discount to gold. Has it helped in increased demand for platinum from customers? (only for Mumbai and Ahmedabad) If so, what is the typical platinum purchased? Is it bars, coins or rings or chains?

Mr. Amit Modak, P.N.Gadgil & Sons Ltd, Even though platinum is at a deep discount to gold, lack of liquidity and higher buying-selling spread are keeping people away from buying platinum for investment purpose. Further making charges of platinum jewellery are too high.”

Mr. Ketan Kothari, RSBL, “Indian consumers have a traditional and religious touch to gold. Gold price rise may not generate a demand for platinum. Instead, it has generated demand for silver”. Mr. Bhargava Vaidya, B N Vaidya Associates, “In platinum, consumers usually purchase bars as an investment. Discount to gold is not understood by majority of customers. No one pushes customers for investing in platinum. Otherwise, this would have been a time when investment demand for platinum would have grown. Platinum remains a choice for a few select customers, that too, in premium jewellery.”

Mr. Prashant Mehta, Rajesh Exports, “Platinum jewellery is not a popular choice amongst the customers. Customers don’t understand the difference between platinum and silver as they look alike. Moreover, platinum melting charges are very high. It is not much promoted metal when it comes to jewellery. Resale value of platinum is not very clear.”

Jewellers' apex body All India Gem and Jewellery Domestic Council (GJC) chairman Mr. Anantha Padmanaban said, "In volume terms, we expect sale to be 20 percent less than last year. In terms of value, it will be same as last year because of higher prices”

Disclaimer: Views are personal and not the views of the publisher.