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The recent decline in gold prices, driven by the Indian government's decision to slash import duty and international price fluctuations, has triggered a surge in demand across the country. This 'gold rush' has resulted in overflowing jewellery showrooms, with customers eager to capitalize on the lower prices. The Indian Bullion & Jewellers Association reports a significant increase in footfall, with some locations experiencing queues and token systems for managing the crowds.
The price drop, which has seen gold prices fall by around 5,900 per 10 grams, has been attributed to the Union Finance Minister Nirmala Sitharaman's decision to reduce import duty from 15% to 6% in the Union Budget. Additionally, international gold prices have slipped below the $2,400/oz mark. While international prices saw a slight uptick on Monday, local markets like Hyderabad and Mumbai still quoted gold at around 68,950 per 10 gm (24K).
Jewellers across the country are reporting a surge in customer walk-ins and sales, with some locations like Mumbai experiencing a gold rush atmosphere. This surge in demand has prompted jewellers to adopt innovative ways to manage the crowds. Even amidst the traditionally quieter Aashada masam in south markets, the import duty revisions and corresponding drop in gold prices have led to an increase in customer walk-ins and sales. Historically, sudden declines in gold prices have driven up demand, and this weekend's surge reflects that.
The surge in demand is also being attributed to pent-up demand from customers who had been waiting for a price reduction. With upcoming wedding seasons approaching, customers have started taking advantage of the price drop. This buying frenzy has even begun before the Shravan masam, a period traditionally known for gold purchases in India. The retail sales have seen an increase of 25-30%, with wholesalers reporting a 20% rise in orders.
Jewellers are optimistic about the upcoming months, with the exhibition in Mumbai early next month expected to further boost sales. After a lackluster period, the gold market is experiencing a revival, fueled by the price drop and the subsequent surge in demand. The current situation highlights the impact of government policies and international market trends on the gold market and consumer behavior.
Source: Gold Rush: Gold Price Drop Triggers Rush at Jewellery Stores