High gold prices dampen Akshaya Tritiya spirit

Tirupati: Gold prices may be shining for investors, but for consumers, the glitter is losing its charm - especially during festive buying seasons like Akshaya Tritiya. Soaring prices have curbed enthusiasm and spending, leading to expectations of a noticeable dip in sales this year.

Gold rates climbed sharply from around Rs 73,000 to nearly Rs 96,000 per 10 grams in the past 12 months, briefly even crossing the Rs 1-lakh mark. This meteoric rise has been fuelled by global economic uncertainties, expectations of interest rate cuts by central banks, and growing investor preference for safe-haven assets. While this trend has made gold an attractive investment vehicle, it has also made it less accessible for traditional retail buyers.

Jewellery merchants are bearing the brunt of this price pressure. The President of Tirupati Gold Jewellery and Silver Merchants Association, KV Satyanarayana, told The Hans India that the price of 22-carat gold has gone up to Rs 8,980 per gram as on Tuesday from Rs 6,500 just a year ago- a staggering Rs 2,500 increase per gram. This sharp rise has significantly dampened consumer enthusiasm.

Traditionally, Akshaya Tritiya is considered an auspicious time to buy gold, and jewellers typically enjoy a surge in sales through pre-bookings and walk-ins. However, this year tells a different story. “Each shop is getting an average of less than five bookings. It’s a clear indication of how weak the sales are this Akshaya Tritiya,” Satyanarayana said, expressing concern over at least a 50 per cent decline in sales compared to last year.

Consumer behaviour has also shifted noticeably. Where buyers once entered showrooms with a design or weight in mind, they now walk in with a fixed budget. “Customers are no longer concerned about how many grams of gold they are purchasing. They are simply ensuring that they don’t exceed their spending limits,” noted Satyanarayana. The emphasis has moved from desire-based purchases to need-based and budget-constrained decisions. Looking ahead, the outlook remains uncertain. Forecasts suggest gold prices could rise further, potentially touching between Rs 1,04,000 and Rs 1,10,000 per 10 grams by Akshaya Tritiya in April 2026. Local traders even expect another price spike by the end of this year.

The broader sentiment among jewellers is that the current trend of cautious consumer spending is likely to persist, especially as market volatility, global political developments, and currency fluctuations continue to drive investment in gold. While this may benefit investors, traditional gold merchants and festive buyers are left grappling with the new reality: in times of golden highs, sales may dip lower than ever.