Consumers seem to be resilient to the impact of volatile gold prices. Jewellery stores across Tamil Nadu have witnessed a sharp rise in purchases. April and May is wedding season, jewellers say, leading to a sales boost of a minimum 60 per cent, especially after Tamil New Year. Several customers purchasing for weddings and other functions are buying slightly higher volumes after the price dip, compared to last month.
Sivagami Babu, a jewellery buyer at T.Nagar, says: “I buy ornaments with a year’s savings. I save some money to buy gold whenever there is a price dip. It is still a good investment option as the price may vary but it will not fall drastically.”
N. Ananthapadmanabhan, regional chairman of the All-India Gem and Jewellery Trade Federation, says people get better returns when selling hallmarked gold. Still, it fetches cash that is 2-3 per cent less than the current price. However, jewellers like Tanishq prefer the carat meter to check purity.
Investors in bullion bars expect a deeper slump. “Instead of buying large quantities, I am going in for small volumes at regular intervals, waiting for the price to stabilise,” says Ravindra Gupta, an investor.
Tamil Nadu consumes most among southern States by some estimates and contributes 16 per cent of south Indian demand.
P.R. Somasundaram, managing director, India, World Gold Council, says the demand for physical gold remains strong.
Mixed response in Kerala
The downswing in the price of gold has had a mixed response. Says P.V. Jose, chief patron of the Jewellery Manufacturers’ Association: “Almost all jewellery shops witness brisk business. There is 30-35 per cent increase in sale.” There are about 500 jewellery outlets and more than 3,000 manufacturing units in Thrissur, the gold heartland of Kerala. The industry provides direct employment to more than 40,000 artisans, including around 10,000 from outside the State. Jewellery-making is almost a cottage industry on the city’s outskirts. The Industry records a Rs. 700-crore turnover per year.
(With inputs from Mini Muringatheri)