The soaring prices of gold resulted in a 20% drop in sales by weight during April 2024, while the overall sales revenue remained relatively stable. With the easing of surveillance pressure as the election phases conclude, jewelers are now restocking inventory in anticipation of the upcoming Akshay Tritya festival, a significant occasion to buy gold.
The rise in gold prices made them reach over Rs74,000 per tola (10 grams), which caused a decrease in demand. But, recent price changes, with a drop of about Rs1,000, encouraged retail traders to buy more in the bulk bullion market.
Nevertheless, jewelers are cautiously awaiting the outcome of the US Federal Reserve meeting scheduled for Wednesday. Traders express concerns that a decision against rate cuts may further impact gold prices.
Reports suggest a gradual resurgence in the bulk market activity, with retail traders venturing out in anticipation of improved consumer demand by Akshay Tritya, on May 10. Moreover, the conclusion of the second phase of elections has brought relief to bullion traders, easing the movement of gold within the trade network.
Previously, stringent restrictions imposed due to the model code of conduct and vigilance by the Election Commission’s flying squads had compelled traders to adopt a subdued stance. Despite protocols issued by the Gems and Jewellery Council to regulate gold movement during elections, many opted to suspend trade activities.
Saiyyam Mehra, Chairman of the Council, acknowledged that the elevated gold rates have led to a 20% reduction in consumer purchases by weight in April, while maintaining stability in monetary terms. He remains optimistic about a potential uptick in demand during Akshay Tritya. Confirming an uptrend in bulk demand, Mehra noted an increase in demand in regions where elections have concluded.