Indian gold demand has slumped dramatically as the Gold Price has jumped...
UNDER NORMAL CONDITIONS, reports Commodity Online in Mumbai, jewelries across India celebrate the wedding season with increased sales and better revenues from selling gold.
But in 2009, the year of global recession, jewelers have hardly anything to cheer about.
Sales are down across the country and a gloomy scene is witnessed in every jewelry shop from Kerala, Mumbai to New Delhi.
Gold jewelry shops now look deserted, in fact, unless customers are coming to sell old gold rather than buying. And those few customers still coming to Buy Gold are buying less of the yellow metal compared to previous marriage seasons, at a time when India's Gold Prices are soaring above 15,000 Rupees per 10 grams.
"Gold sales have come down drastically," says Ashish Malhotra, owner of A M Jewellers in Mumbai's Zaveri Bazaar. "Generally, families in India begin their shopping for gold jewelry from the first week of March, as April and May are the traditional wedding season.
"But this year, there are hardly any families coming to Buy Gold jewelry."
Instead of Buying Gold at these high prices, Malhotra says, most of the gifts bought for weddings these days in India – the world's No.1 market for physical gold each year – are silver ornaments or very small gold items.
Another situation is that people are now gifting old ornaments to their daughters on the occasion of their wedding, instead of buying new ones.
Most of the buyers seeking new jewelry are buying for their children, according to Indian dealers. The practice of gifting gold items to relatives and friends seems to be in decline.
Overall, India's demand for gold has gone down by over 40%, and with the Gold Price still hovering above R15,000 per 10 grams, business is unlikely to improve in the near future.
In the northern India state of Bihar, at least 250 kg of gold used to be sold during each marriage season. But this marriage season, according to dealers, sales would hardly total 100 kg.
Traders say the situation could improve only if prices go southward, dipping between 13,000 and 14,000 for 10 grams.
Meanwhile, the abrupt rise in the Gold Price has led to an increase in the popularity of some innovative light-weight jewelry, made of hollow tubes and multi-color semi-precious stones.