Jewellers in Gujarat are expecting a decline of almost 50% in gold and silver purchases this Diwali season as compared to previous years due to the Covid-19 pandemic.
Due to higher gold prices and the overall slowdown, purchases of the yellow metal are expected to be much lower than the 2019 season. Despite this, most jewellers are happy with the customer footfall considering the overall economic slowdown.
Generally, Diwali buying starts in Gujarat from Pushya Nakshatra and continues till Labh Pancham (the fifth day after Diwali). This year, on the day of Pushya Nakshatra (last Sunday), Gujarat witnessed buying of gold and silver worth Rs 350 crore, said Jigar Soni, president of the Ahmedabad Jewellers Association.
“Last season, it was around Rs 550 crore on the day. Still, we are happy with the numbers considering the current situation in the market due to Covid-19. By the end of Diwali season, estimated sales of precious metals and jewellery would easily cross Rs 500 crore, which would be around 50% less than 2019 Diwali sales,” he said.
According to Soni, nearly 530 kg of gold and 10,700 kg of silver was sold last Sunday. Jewellers are expecting heavy sales on the day of Dhanteras (November 14) and Labh Pancham in wake of Gujarati New year, which falls on November 16.
“Gold and silver buying is much higher than our expectations this year. Lower interest rate on bank term deposits is another reason people are buying precious metal despite prices having crossed Rs 50,000 per 10 gram,” he said.
Generally, during the festive season, Gujaratis travel outside the state and affluent families prefer trips abroad. This year, due to the pandemic, the savings on travel expenses are also translating into gold buying, said Soni.
Besides, the wedding season is also starting after the festive season. Shantibhai Patel, president of Gems and Jewellery Trade Council of India (GJTCI), said, “Due to Covid-19, the state government has put restrictions on the number of guests, which would reduce overall cost of weddings. Many families have diverted these savings to gold purchases.”