The India Bullion and Jewellers Association (IBJA) is forecasting gold sales this coming festive season in India to be flat. They project full year sales to be about 40 mt. This chart represents no change from last year’s flat trend. This suggests a reluctance from consumers to spend as gold prices march higher.
And with India entering the festive season, gold is often the first big ticket purchase for many households. This year, India is expecting about 25 metric tons of gold sales in the middle of a series of festivals that permeate the country. Overcoming these hurdles with steep costs won’t be easy, but consumers seem ready to get in on gold buying, especially on auspicious days.
More specifically, a long-standing trend of anti-gold purchase hesitancy was broken in August. This month, families took part in a special jewelry shopping trip in preparation for son’s wedding. It was a momentous occasion for all the consumers who lobbied hard to win this victory. This might help indicate a turn in their attitude toward purchasing gold.
With the arrival of the wedding season, demand for jewelry skyrockets throughout India. The deep cultural significance of gold in celebration has been brought to the forefront by this year’s events. Gold is an important part of family savings, and families routinely buy gold jewelry in wedding ceremonies. These occurrences are fundamental drivers of consumer behavior in the gold market.
Yet, volatile pricing has a profound impact on buyer demand. So the recent spike in gold prices has caused some consumers to exercise more caution when purchasing. Too much uncertainty remains for most to jump in with both feet, particularly in today’s economic environment, before deciding to purchase.