Gold sales set to peak during Onam; expected to hit Rs 7,000-8,000 crore

Kochi: Gold jewellery sales are set to sparkle this Onam season. Experts predict sales worth Rs 7,000 crore to Rs 8,000 crore. This represents about eight percent of Kerala's annual gold sales, which total around Rs 1 lakh crore.

Despite high gold prices, jewellers are hopeful for a 20 to 30 percent increase in sales value this year. Sales have been robust across the state - boosted by the ongoing wedding season and the Onam festival - as this year’s gold season spans a full month due to Onam’s timing at the end of the Chingam month (the first month of the Malayalam calendar).

Weddings are driving purchases, with buyers opting for gold in weights ranging from 20 to 100 sovereigns, and some affluent customers splurging on 160 to 200 sovereigns.

Gold and bonuses

T. S. Kalyanaraman, Managing Director of Kalyan Jewellers, noted that Onam, combined with bonuses and other benefits, drives a massive boost in sales. He added that the Chingam month (August-September) sees the highest sales in Kerala after the April-May season.

Duty cut benefits

The reduction in gold import duties in the Union Budget has led to a drop in gold prices from Rs 55,000 in July to Rs 50,400 within days. This has encouraged advance bookings. M. P. Ahammed, Chairman and Managing Director of Malabar Gold and Diamonds, reported that despite recent price increases, sales have risen massively. He also mentioned that lower customs duties have reduced smuggling and boosted domestic sales.

Trend towards diamonds and lightweight jewellery

With gold prices reaching record highs, there is a growing demand for 18-carat gold, which is cheaper than 22-carat gold and popular among younger buyers. Joy Alukkas, Chairman of the Joy Alukkas Group, confirmed a rise in sales of diamond and lightweight jewellery recently.

Price surge by over Rs 10,000

Gold prices have surged by 23 percent compared to last Onam. The price of one sovereign increased from Rs 43,600 on August 27-28 last year to Rs 53,640 this year, with peaks even crossing Rs 55,000. Dr. B. Govindan, Chairman of the Bhima Group, observed that the sharp rise in gold prices has led wedding parties to purchase gold in lakhs rather than in sovereigns.

Attractive offers

To attract customers, many jewellers are offering appealing deals for Onam, including discounts on labour charges and exchange offers for old jewellery. Jose Alukas, Chairman of the Jos Alukkas Group, reported a surge in new customers taking advantage of these exchange offers.