Surging Gold Prices Drive Indian Festive Season to Favor Coins Instead of Jewelry

Gold prices have surged to record levels in India, influencing consumer behavior during the Dhanteras festival. Traditionally, Dhanteras marks the beginning of the Diwali celebrations, making it a key date for gold purchases.

Changing Trends in Gold Purchases

This year, buyers shifted their focus from jewelry to gold coins and bars. Industry officials attribute this trend to soaring prices, with hopes that gold’s upward trajectory will persist.

Dhanteras Gold Sales Data

• Overall gold sales volumes during Dhanteras were down by 10-15% compared to last year.
• Gold jewelry demand dropped nearly 30% as prices soared.
• Despite lower volumes, the total value of gold sales increased significantly due to higher prices.

Rajesh Rokde, chairman of the All India Gem and Jewellery Domestic Council, reported that the value of gold transactions rose even as the volume declined. On October 18, the local gold price reached 127,008 rupees per 10 grams, a significant jump from last year’s price, which was 132,294 rupees.

Cost of Gold Jewelry vs. Coins

The steep manufacturing charges for jewelry, typically 10-20% of the gold price, made them less appealing compared to coins and bars. Surendra Mehta from the India Bullion and Jewellers Association noted that these alternative forms of gold were “flying off the shelves.”

Industry Reactions and Discounts

To maintain consumer interest throughout the festive season, jewelers are offering substantial discounts on manufacturing charges. Sachin Jain, CEO of the World Gold Council in India, stated that the industry is actively responding to consumer trends.

Silver Demand Surges

Interestingly, demand for silver has also increased this year. Investors are showing a keen interest due to silver’s impressive price rally, suggesting it might outperform gold in the near future.

• Dealers are reporting premiums of up to $25 per ounce over official domestic prices.
• This premium is the highest recorded in over ten years.

Future Expectations

As Dhanteras continues to unfold, with stores remaining open late into the night, industry leaders expect sustained buying momentum. The combination of high gold prices and strategic promotions is likely to shape consumer purchasing behavior in the days ahead.