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Diwali Jewelry Sales Rise on Lower Gold Prices

Nov 8, 2016 11:04 AM   By Rapaport News
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RAPAPORT...  Jewelry sales in India improved during the Diwali festival as lower gold prices helped release months of pent-up demand.

Retail activity increased year on year during the period which includes Dhanteras on October 28, a gold-buying festival, and Diwali on October 30, market observers noted. This followed a sluggish spring and summer season that were hit by a six-week strike in March and April as many jewelers shut their shops to protest a new 1 percent excise duty.

“For almost six months there was a critical situation in India because of excise and other factors,” said G. V. Sreedhar, chairman of the All India Gems & Jewellery Trade Federation. Gold prices increased 22 percent between January and September, according to Kitco, causing consumers to refrain from buying, while the loss in workdays during the strike also contributed to lower jewelry sales.

However, sales jumped as much as 25 percent compared to Diwali last year, Sreedhar estimated, with the improvement strongest in the North, West and East of the country. Sales grew an estimated 10 percent to 15 percent in southern India, which is more focused on the Akshaya Tritiya festival, which fell on May 9, he explained.

Tanishq, one of India’s largest jewelry brands, grew 39 percent between Dussehra on October 11 and Diwali, reported Bhaskar Bhat, managing director of Titan Company, which owns the brand.

Gold prices dipped 3 percent to $1,272 per ounce in October which jewelers were able to pass on to consumers by lowering retail prices, Sreedhar said. A plentiful monsoon season in India’s largely agricultural economy also put a spring in shoppers’ steps, he explained.

As gold sales recovered during the season, diamond sales also improved as consumers bought studded jewelry along with their precious-metal items, Sreedhar noted. "Wholesalers are seeing good orders from the retail end," said Pratik Shah, a partner at Starrays, a Mumbai-based manufacturer and supplier of solitaire diamonds from 0.30 carats to 5 carats.

The emphasis on diamond sales was more on rings and lower-quality solitaires below 0.50 carats, which recorded better sales than higher-value items, Sreedhar added.
Tags: Akshaya Tritiya, All India Gems & Jewellery Trade Federation, Bhaskar Bhat, Dhanteras, Diwali, festive season, G. V. Sreedhar, GJF, holiday season, India, Jewelry, Pratik Shah, Rapaport News, Starrays, Tanishq, Titan, Titan Company
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