Gold demand lowers Pan India, Improves in South!
In his expressions, ‘India’s gold market in May’ inked by Mukesh Kumar, Market Intelligence Group-World Gold Council (WGC ) said, Jewellery demand improved in southern India but remained weak in other regions!
Jewellery stores reopened in Kochi-Kerala in the week beginning 18 May.
From discussions with local jewellery retailers in the city, daily sales in May were reported to be ~60-70% of the comparable period of the previous year. The retailers mentioned that the majority of sales were for delivery of jewellery against advanced bookings made a few months ago and the number of new customers was low.
In Tamilnadu, following the state government directive, only small jewellery stores without air-conditioning were permitted to open; large jewellery stores and shops in the mall remained closed. In accordance with this directive, jewellery stores remained closed in Coimbatore and only small jewellery stores opened in Chennai during May. Jewellery stores in the state of Karnataka reopened early in the month and retailers reported average daily sales around 25-30% of the comparable period of the previous year.
In other regions, jewellery stores remained closed in Mumbai and Ahmedabad due to the high number of Covid-19 cases. Regional players such as PN Gadgil & Sons, PNG Jewellers, and Waman Hari Pethe all reported better sales than single standalone stores, however daily sales in the western region were ~15-20% of the comparable period of the previous year.
Jewellery retailers in the north and east regions have reported daily sales of ~20-25% of the comparable period of previous year.
Jewellery manufacturing activity resumed in the cities of Coimbatore and Thrissur but remained suspended in other manufacturing hubs due to the migration of artisans to their hometowns amid the virus outbreak.
Recycling volumes increased modestly with a higher propensity towards gold loans against jewellery!
A significant jump in gold recycling volumes amid Covid-19 was anticipated, as consumers were expected to turn to gold recycling and take advantage of the higher gold price to meet liquidity needs in an uncertain environment. However, from discussions with the industry it appears that gold recycling increased only modestly in the month.
Instead, to meet liquidity needs, consumers preferred to pledge their gold jewellery for loans. The banks have identified the financial needs of individuals and small businesses and rolled out attractive gold loan schemes in response.
