Gold demand set to moderate: WGC
With gold witnessing a spike in prices over last few weeks in the domestic market, the demand is expected to moderate during the upcoming festive and wedding season.
After two consecutive quarters of year on year ( YoY) declines, the JulySeptember quarter saw gold jewellery demand in India grow by 10 per cent to 148.8 tonnes taking the overall consumption to 183.2 tonnes. The dip in the prices of gold below ` 29,700 per 10 gram during the beginning of the quarter attracted bargainhunting consumers who had been waiting for a good time to enter the market.
However, the prices shot up as the rupee witnessed steep fall against the dollar impacting sentiments.
“The last quarter is normally a vibrant period for gold related purchases with festivals and wedding season. However, the seasonal spike in demand could be moderate this Dhanteras- Diwali due to factors like a lack of liquidity, rising Indian prices and impending elections in some key states impacting trade logistics,” said Soma- sundaram PR, managing director, India, World Gold Council ( WGC).
WGC expects full year gold demand to be at the lower end of 700- 800 tonnes range.
While the price dip in August was a helpful boost to the industry, WGC said it highlighted a structural challenge jewellers face. Gold jewellery retailers main strategy to generating sales has been to compete on price.
For example, offering price discounts or attractive gold- for- gold exchange programmes during festivals. While a few large, organised retailers have developed brands, little effort has been put into tailored marketing campaigns.
As consumer tastes change, and competition from other product categories intensifies, it said the industry needs to ensure it develops products and marketing campaigns which meet potential consumers’ desires.