India’s gold jewelry sales just experienced their biggest annual decline on record. This decrease breaks a six-month streak of increases that continued through August. While print media is suffering, buyers are feeling the pressure of steep prices of gold. This has dramatically shifted their purchasing behavior, particularly around the holidays.
The change hit home when one mother decided to go gold jewelry shopping for her daughter. She was in the midst of planning her son’s wedding. Historically, these events usher in a flood of gold buying. This year, consumers can’t make the math work. With prices so high, most people have simply purchased less or stopped buying them at all.
Moreover, the India Bullion and Jewellers Association (IBJA), the largest jeweller body in India, has recently released a significant projection. Overall volume of festive gold sales will remain largely unchanged from last year, they project, totaling some 40 metric tons. This regional stagnation is a microcosm of a larger trend across the country as stubbornly high inflation forces consumers to pull back on spending.
Analysts suggest that the high cost of gold, influenced by global market factors, has created an environment where consumers are reconsidering their buying decisions. And families experience that same thrill as they plan for those life milestones, such as weddings. Gold jewelry typically shines brightest during these celebrations.
Gold was once the epitome of Indian tradition. During festivals and marriages it played an integral part in rituals. The recent dramatic price increases have rendered it all but impossible for many. Today, consumers contend with the simultaneous task of preserving cultural traditions and affordability as fiscal stressors loom.