So what if the prices are fluctuating? The yellow metal continues to shine for the Indian consumer
Fluctuating gold prices may have investment bankers and economists worried the world over, but nothing seems to deter Indians from the glitter of this precious metal — jewellery stores are never empty! Data from the World Gold Council (WGC) for 2012 reveals that the source of the greatest demand for gold remained with individual consumers — a staggering 72 per cent.
Insiders in the jewellery industry report that several meetings of the governing councils of jewellery associations have been held and that there are proposals to suspend the sale of gold coins and bars in order to curb the import of gold and to induce stability in our depleted financial coffers. “Such a move would be a patriotic one on our part,” admits N. Ananthapadmanabhan, managing director of NAC Jewellers. “Our motto must be ‘nation first’,” he affirms. However, he suggests a practical alternative for those whose love of gold shines on — “Invest in paper gold, not physical gold. Opt for gold exchange-traded funds. Gold has always been considered a safe haven in India.”
Radhakrishnan, M.D. of GRT Jewellers, says, “Business has been normal this June. There were many ‘muhurtham’ days. But customers are also waiting and seeing.” Renowned jewellery chains such as GRT and NAC retail an array of gold jewellery and products such as gold coins. This ensures a pot pourri of clientele — from collectors who seek heirlooms, wearers looking at adornment that represent their individuality to those that are specific about ‘0-wastage jewellery’.
Boutique jewellers in the city have similar experiences to share. “We see people buying gold at every stage, whether the price is high or low,” says Sunith Samdaria of Gehna. Gehna specialises in custom jewellery — a relatively niche market with select, discerning customers. But Samdaria admits that “many big orders that were pending because customers were waiting for prices to fall, have been given the go ahead”. S. Ahalya, creative head of the exclusive Rasvihar, says that though everyone has been watching gold prices, her clients “are more focussed on the jewellery than the investment”. It is no surprise that this monsoon, the sheen of gold will no doubt shine through!
The hike in customs duty on gold from six to eight per cent, coming on the heels of several other policy and regulatory measures in recent weeks, is yet another step to limit supply of gold by making it more expensive. Almost all of India’s gold demand is met through imports and this hike will increase the cost of gold for retail customers. What this means is that sales of coins and bar could be curbed temporarily as could the acceptance of gold as collateral for bank loans etc. This also means that it’s currently a buyers’ market and sales are not recommended, especially of bullion.
Managing director, India, World Gold Council