Gold no longer hot cake on Dhanteras

Hyderabad: Dashing hopes of sales revival on Dhanteras, jewellery shops across two Telugu states witnessed a subdued activity on Tuesday as buying enthusiasm among consumers was confined to automobiles, smartphones, white and brown goods segments.

Traditionally, Indians consider Dhanteras, which falls two days ahead of Diwali, and Akshya Tritiya as auspicious occasions to purchase yellow metal. Interestingly, both these festivals turned out to be a damp squib this year for jewellery shop owners and bullion traders across the Telugu states. Reports emanating from Mumbai, the country’s bullion hub, and the national capital of New Delhi, also indicated sluggish sales, mirroring similar trend across the country.

A number of bullion traders and jewellery sellers The Hans India spoke to, lamented that sales were down by a whopping 70 per cent compared to last year, owing to a gamut of factors such as lack of disposable income, cash crunch, slowdown in industry verticals and more particularly GST.

“Dhanteras and Akshya Tritiya, also known as Akha Teej and falls in April, are considered to be auspicious and fortunate days to buy gold, silver and utensils in addition to make good beginnings. However, it turned out to be a major disappointment for us jewelers,” said Niraj Agarwal, managing partner of Hyderabad-based Surajbhan Jewellers.

AP Bullion Merchants’ Association has also expressed disappointment over sales drop. Its president Boorugu Mahabaleshwara Rao said: “The situation is not different at bullion markets in Telangana and AP.”

Concurring with his views, Pravin Kumar, secretary, Twin Cities Jewellers’ Association, said: “Note ban has squeezed entire savings of women and this affected our sales. Then GST hammered down further as most of the disposable income vanished in the market. Consumers shy away from spending white money. Consumers’ first priority goes to mobiles, cars then TVs, refrigerators, washing machines, etc. We suffer 70 per cent drop during this Dhanteras season. After note ban, our sales dropped by over 40 per cent throughout this year.”

With sluggish response from consumers and hit by negative global cues, gold prices ended lower. Spot gold on Tuesday closed Rs 140 lower at Rs 30,710 per 10 grams due to a weak trend overseas and in the country.

Many jewellers expected that recent relaxation of norms that stipulated proof of identity and PAN for purchases worth over Rs 50,000, would boost sales.

As per the revised norms, no KYC (know your customer) is required for purchases up to Rs 2 lakh. “We expected considerable improvement after Prime Minister Modi relaxed KYC requirement for purchases of jewellery over Rs 50,000, but it’s nowhere near to our expectations.

Majority of middle class consumers have diverted their buying options to consumer electronics and other gadgets, partially hitting gold jewellery sales. Now, we focus on post-Diwali and into the wedding season,” Agarwal said.

According to an IANS report, the situation is not encouraging in other major bullion markets in India. Nitin Khandelwal, chairman, All India Gems and Jewellery Federation, said: “With certain issues, including the mandatory PAN/ Aadhaar card for purchase of over Rs 50,000 gold or jewellery, having been amicably resolved, it has boosted buyer sentiments. Though the footfalls are increasing, we don’t
expect any growth over the last year’s sales.”