Gold fails to shine on Akshaya Tritiya

​Hyderabad/Mumbai: High gold prices dampened sales on Akshaya Tritiya, considered auspicious to buy yellow metal, with a section of industry players putting the sales figure 20-30 per cent 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.

People bought less gold than last year during the festival on Monday, industry officials estimate, as droughts have hit the earnings of millions of farmers and the metal's price rallied. “Gold sales have been far lower this time than last year.

We have seen nominal sales. Six years ago, shops used to be abuzz with activity till 11 pm. This time around, most of the jewellery shops in General Bazar wore deserted look by 8 pm itself,” Suryaprakash Rao, Honourary President, Telangana Bullion, Gems and Jewellery Federation (TBGJF), told The Hans India.

He blamed high gold prices for the lukewarm response. “Also, people are buying other things such as property on this day. This is also leading to fall in gold sales,” he added.

Weaker demand from the world's second-biggest consumer could limit a rally in global prices, which are up around a fifth this year. Indian prices were around 30,000 rupees per 10 grams on Monday, up nearly 10 per cent from a year ago.

Akshaya Tritiya is the second-biggest gold-buying festival in India after Dhanteras around October-November, but jewellers failed to draw buyers despite spending heavily on print and television advertisements and offering discounts on design fees.

Somasundaram PR, head of the World Gold Council's Indian operations, said that through aggressive advertising jewellers had been trying to build sales momentum, which was lost due to the strike earlier this year.

"Compared to last year demand is nearly 35 percent lower." he said. "Higher price is the key deterrent. We thought pent-up demand would drive sales, but demand is quite weak."

Despite growth, jewellers feel buying sentiment was weaker than expected especially when the industry observed a 42-day of strike against the excise levy.

Sharp volatility in gold prices was another factor which hit consumer sentiment across the country. Gold price recorded a high of Rs 85 from previous close to settle at Rs 29,855 per 10 grams on Monday.

Mumbai resident Manish said he had cut purchases by half this year. "I wanted to completely avoid purchases but later decided to buy a small amount as every year we buy something," he said after buying gold earrings for his wife.