COVID-19 impact: Will consumers ditch gold this Akshaya Tritiya?

WGC data showed that demand for the yellow metal in the January-March quarter saw a growth of 37 per cent year-on-year at 140 tonne due to ease of restrictions

Published: 13th May 2021 11:59 PM  |   Last Updated: 13th May 2021 11:59 PM   |  A+A-

Gold Jewellery

Gold Jewellery. (Photo | EPS)

By Express News Service

NEW DELHI: Given the rising graph of coronavirus cases in many states, gold jewellers are staring at another year of subdued activity this Akshaya Tritiya. 

The fledgling recovery in gold demand in the first three months of the year may be snuffed out with the renewed surge in Covid-19 infections and the consequent localised lockdown imposed in at least 22 states even as the demand-supply dynamics this year are very different unlike the last year when India announced a nationwide lockdown. 

Data from the World Gold Council (WGC) showed that demand for the yellow metal in the January-March quarter saw a growth of 37 per cent year-on-year at 140 tonne due to ease of restrictions, pent-up demand and softening of prices. Net bullion imports during the period saw a 262 per cent increase to 301 tonne.

“Consumer demand, as compared to previous years, has taken a hit as stores are either closed or are operating only for a few hours because of the lockdown and restrictions across states to break the chain of coronavirus spread,” said Suvankar Sen, CEO, Senco Gold & Diamonds. 

Meanwhile, there is some traction in the online sales channel, thanks to the flexi gold rate plan introduced this year. “Advance booking of gold online is doing well, contributing around 10-15 per cent of overall business. This is primarily because flexi gold rate ensures customers the lowest rate when they will complete the purchase after advance booking,” Sen added.

According to Pankaj Arora, national convener of All India Jewelers and Goldsmith Federation (AIJGF), cash-starved jewellery traders across the country had set high hopes for good business on Akshaya Tritiya this year, but the lockdown has rekindled their expectations. 

“In 2019, there were sales of more than `10,000 crore on this auspicious day, but last year on the same day due to the nationwide lockdown, sales stood at just `500 crore. With Akshya Tritiya falling in the lockdown period for two continuous years, the gold and jewellery trade has suffered a big setback,” he added.

Somasundaram PR, managing director of WGC (India) believes that the second half of 2021 could see a rebound in demand. 

"First quarter demand was very good in spite of a 14% y-o-y increase in gold prices. Traders also felt that business will be good and imported more. But the disruption due to the pandemic may mean a muted Akshaya Tritiya. Last year, the festival was a complete washout. By June, however, things may come back due to the actions taken by the government," he added.


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