Covid restrictions dampen gold sales, demand crashes by 75-80% on Akshaya Tritiya

Covid restrictions dampen gold sales, demand crashes by 75-80% on Akshaya Tritiya

Kolkata: Demand for gold has crashed by 75-80% this Akshaya Tritiya on Friday compared with the festival in the pre-Covid-19 period two years ago, hurt by sentiment dampened by the pandemic and restrictions on trade and movement of people in several states.

Demand was minuscule last year, when the country was in a lockdown on Akshaya Tritiya in late April. But consumer sentiment wasn’t this bad, as there were very few Covid cases at the time, and many had booked gold over the phone or purchased it online.

Whatever little bit of business is happening now, it is through online platforms, jewellers said.

“The current Covid situation is not favourable for purchasing gold though Indians prefer to buy the yellow metal on Akshaya Tritiya to bring in luck and prosperity. Some of them might make some token purchases. Demand is down by more than 80% this year,” said Surendra Mehta, national secretary of the India Bullion & Jewellers Association.

Gold was selling at Rs 47,967 per 10 gm on Friday.

For Kerala-based Kalyan Jewellers, 20% of its showrooms in the country are functioning but with regionalised timing restrictions.

“That said, with the evolving on-ground situation and individual concerns, the overall sentiment is not favourable with customers hesitating to step out of their homes. Therefore, the Kalyan Jewellers Gold Ownership Certificate, launched during last year’s lockdown, continues to see traction this season,” executive director Ramesh Kalyanaraman said.

Senco Gold & Diamonds chief executive Suvankar Sen said gold prices had increased by almost 5% in the past one month and that the metal was a safe investment and hedge against inflation.

“Consumer demand, though, as compared to previous years, has taken a hit due to partial or full lockdowns. However, because of the auspicious time of Akshaya Tritiya and the upcoming wedding season, we are seeing online sales. Also, thanks to the flexi gold rate plan introduced this year, we are witnessing that advance booking of gold online is doing well, contributing around 10-15% of overall business,” he said.

Ishu Datwani, founder of Mumbai-based Anmol Jewellers, is disappointed with this year’s Akshay Tritiya sales. “It is a very slow start and the business is down by 95% as compared to normal year’s Akshaya Tritiya. Our experience of last year shows that not much sales happen online so even this year, we are not expecting anything substantial.”

Sales is down in the northern part of the country as well. Pawan Gupta, director of Delhi-based PP Jewellers, said: “Akshaya Tritiya is expected to be the same as last year or even worse. There has been barely any business activity and most states are on lockdown to combat the disease. The day of Akshaya Tritiya has started slowly, and if there are any bookings or enquiries, they are being handled solely by telephonic or digital channels.”

Digital gold, which is bought through payment apps like Paytm is showing some movement this Akshaya Tritiya with purchases in the Rs 3,000–4,000 range.

Ketan Kothari, director of Augmont jewellers, said sales of digital gold were better than last year.

“In 2020, Augmont sold around 15 kgs of digi gold on Akshaya Tritiya. This year, the sales are around 30 kg till late afternoon,” Kothari said.

Rohan Sharma of RK Jewellers in Delhi said due to the “frightening situation” in the city, the company “as a brand also did not concentrate on selling, but rather expected everyone to stay home and stay safe”.

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