Resilient outlook for Indian gold wedding jewellery demand
VICENZA, Italy, May 23, 2010 – Gold jewellery demand in the next auspicious wedding period in India is expected to be resilient because of the strong investment appeal of the yellow metal, but soaring prices are expected to reduce the quantity of gold purchased, India-based jewellers exhibiting at the Vicenza Fair said.
Diamonds are becoming increasingly popular at Indian weddings for higher income groups, they said.
However, one senior jeweller, Hemant Shah, a Council member of the Gem and Jewellery Export Promotion Council (GJEPC), talked of a sharp drop in demand for gold during India’s recent Akshaya Trithiya auspicious day, because of the high price of gold. For many Akshaya Trithiya is the apt day to buy gold.
The jewellers said the current auspicious period for weddings in India runs until July, and then from November 2010 to March 2011.
“The pace of Indian demand (for weddings) is busy — for gold and diamond jewellery,” said Pradeep Kumar Godha, managing director of Mumbai-based Shantivijay Jewels Ltd.
Viral Mehta, director of Mumbai-based Dimpex Jewels Pvt. Ltd., said, “The purchasing power of people in India is increasing. Gold plays a very important role in any wedding in India.”
Jewellers exhibiting at the Vicenza fair noted increased demand for diamonds at Indian weddings in the higher income groups.
They said Indian gold wedding jewellery demand was likely to hold up despite rising gold prices, as Indians saw gold as an investment.
But they noted that volatility in the gold price complicated purchasing decisions.
“Volatility creates a problem,” Kumar Godha said.
Shah said the high price of gold was encouraging some families to turn to diamonds, whose prices had collapsed during the financial crisis.
Platinum jewellery remained the preserve of the most affluent Indian weddings, while palladium faced a tough uphill battle to break into the Indian market, jewellers said.