With gold jewelry sales in India forecast to remain lackluster this festive season—an average of one-third below normal—China’s festive demand might make a significant impact. The India Bullion and Jewellers Association forecasts total sales volume will be about 40 metric tons, equal to last year. High prices continue to impact consumer purchasing behavior, leading many to rethink their spending on gold jewelry during this traditionally vibrant shopping period.
As the holidays of Diwali and Dussehra come upon us, many families celebrate this time of year by purchasing gold jewelry. Another shopper is a fierce momma bear. She has recently begun a search for just the right pieces for her son’s wedding this August. She felt the pull of gold’s dangerous seduction. Due to inflation, she’s had to be more picky about what she buys.
Overall demand has been dented by the recent sharp increase in the price of gold. It’s no wonder that so many prospective purchasers are starting to feel the squeeze and either delaying their purchase or choosing smaller products. Together, the high price of gold and the change in the marketplace due to COVID-19 has turned consumers skittish. Today, they are prioritizing necessities over discretionary spending.
While consumer confidence might be falling due to inflation, the cultural importance of gold in Indian weddings and festivals still holds strong. Gold remains rightfully prestigious and prominent in such significant celebrations. Around 70% of Indians invest in gold, with many households choosing gold jewelry during festival season. Not only is it an investment, but it is a visible beacon of prosperity. We know that times are hard right now, with high inflation and rising prices hitting families especially hard on their daily budgets. So now they find themselves reconsidering how to spend that money.
The India Bullion and Jewellers Association’s projection is symptomatic of a larger trend that has taken hold of the market. Retailers across the country are bracing for a season where sales may not see significant growth compared to previous years. Most jewelers experience an increase in customers asking about alternatives. Customers are excited to buy silver and to see cheaper, more alternative jewelry designs.