Gold getting its glitter back

Business had taken a hit after demonetisation and Cyclone Vardah

Gold, which had lost its sheen in the Chennai market during the first quarter of this year post cyclone Vardah and the effects of demonetisation is now beginning to glitter ahead of Akshaya Tritiya. Analysts who track the yellow metal in Chennai have indicated a 20% growth this season. A quick scan at 10 jewellery shops in Chennai showed that pre-booking of gold has been positive and healthy.

Joseph Prince, Managing Director of Prince Jewellery, said there was a small improvement in sales compared to last year and they had a fair amount of advance booking.

T.S. Kalyanaraman, Chairman and Managing Director of Kalyan Jewellers, said, “Early indicators suggest robust growth in sales leading up to Akshaya Tritiya. Recently, we acquired an e-commerce jewellery platform candere.com, which will help us increase sales.” He added, “This year around, we offered a pre-booking option for Akshaya Tritiya where in they can select the ornaments prior to the date and take delivery on or before Akshya Tiritya, thus avoiding the rush.” Tamil Nadu is the largest market for Kalyan Jewellers.

Kishore Kumar Jain, Managing Director of Khazana Jewellery said, “The early indications this season have been positive for us.” The group has 55 outlets, of which 17 are in Tamil Nadu. “We generally don’t offer discounts. Gold is for investments and that is one reason why we don’t come up with discounts,” Mr. Jain said.

Kamala Singh, who came to one of the shops in T.Nagar, the gold hub of Chennai, said, “I usually buy one sovereign of gold every month, but post Vardah and demonetisation I did not want to spend much. But since its Akshaya Tritiya I thought I will purchase to compensate for five months now.”

According to P.R. Somasundaram, Managing Director of World Gold Council’s (WGC) India Operations, latent demand following demonetisation and markets at such highs could also be supporting factors for good demand this season, more so given the lag between dollar price and rupee price appreciation. Traditional safety perception of gold gets stronger during such globally turbulent times. “The appreciating rupee has opened up opportunity for those who want to invest in gold,” he said. Akshaya Tritiya falls on April 28.