2024-10-23 05:30:04 :
Gold prices hit a record high on Thursday amid geopolitical tensions in the Middle East and uncertainty over the U.S. election. 24-karat gold hits new highs $Friday Capitals 10g 78,293.0. Gold trades at new high $As of 6:45 pm on Monday, there were 78,348 pills per 10 grams, according to MCX data.
India is the world’s second-largest gold consumer and demand typically surges during festivals and weddings, which typically occur in the second half of the financial year. However, higher gold prices may curb buying this year.
“Whatever our indications are, (consumer) sentiment is high. There may be some dampening effect on gold prices,” Ajoy Chawla, chief executive of Titan’s jewelry unit, said in an interview Mint.
In the September quarter, Titan’s jewelery unit, which includes brands such as Tanishq and Mia, reported a 25% rise in domestic demand compared with the same period last year. Titan is one of the largest organized jewelers in the country.
Tax cuts help demand
The company said in its quarterly update on October 4 that a significant pick-up in consumer demand following the reduction of gold import tariffs from 15% to 6% led to strong double-digit gains in gold (primary colors) during the quarter.
However, he said high gold prices were still a concern. “I can’t deny there’s some concern because a lot of people are interested and they’re just waiting to see if there are any adjustments,” he said.
In response, the jeweler, which operates more than 475 stores, has stepped up its gold buyback program, increased the number of lightweight embellishments in its collections and reduced its production fees.
“About 50% of our stock keeping units or SKUs in our system today are lightweight products optimized for gold. We launched 500 lightweight new designs specifically for Tanishq’s festival; and of course, in Miya, almost Everything is lightweight,” Chawla said. “Considering the fluctuations in gold prices, we have launched the best deals – you can buy now, pay a small down payment and buy closer to Diwali where you can choose at a lower rate… We are also launching gold Redemption Plan.”
Meanwhile, Kerala-based Kalyan Jewelers reported a 39% year-on-year revenue growth in the second quarter. The growth was driven by strong in-store sales across all markets and lower import duties on gold. While the Shraadh period and gold price fluctuations had some impact, increased footfall in July-August largely offset these factors.
However, the retailer is keeping a close eye on the recent surge in gold prices.
Ramesh Kalyanaraman, executive director of Kalyan Jewellers, is optimistic about the demand in the third quarter. He said price fluctuations often lead to a temporary pause in consumer purchases, but the company has a strong festive program that includes promotions, pre-orders and affordable jewelry designs.
Fits consumers’ budgets
Given the volatility in gold prices, retailers are making sure they produce products that fit within consumers’ budgets. “If a shopper walks in with a budget of Rs 2 lakh or Rs 5 lakh, they may not get the same weight as last year due to the increase in gold prices. So, we keep that in mind and design products that suit their price range. “
The retailer has expanded its 18 carat jewelery range to meet the growing demand for affordable jewelery in smaller cities. “Until two years ago, such products were only available in large metros, and now we are seeing demand for such products in second- and third-tier cities as well,” he said. This lifted restrictions on gold purchases despite rising prices.
The move comes at a time of increasing competition in the organized jewelery industry. In July, Aditya Birla Group announced its entry into the branded jewelry business, marking the emergence of another large-scale conglomerate in India’s 6-7 trillion rupee jewelry market.
Titan’s Chawla said: “Every organized player is expanding at some aggressive pace due to formalization. More organized players will expand and the intensity of competition in terms of gold prices and fees will remain the same.”
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