After Finance Minister Nirmala Sitharaman announced a reduction in gold customs duty in Budget 2024, customers are rushing to jewellery stores to take advantage of lower gold prices.
The increased interest in purchasing gold aligns perfectly with the upcoming wedding and festive season, leading to a substantial rise in demand for the precious metal.
In India, the world’s second-largest gold market, people are eager to purchase gold at these new reduced customs duty rates. Many people are now choosing heavier pieces of jewellery that were once too expensive when gold prices peaked at over Rs 74,000 per 10 grams.
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Due to increased demand for gold, which surged up to 20% following a recent customs duty cut, many jewellers have cancelled craftsmen’s leave. Whereas, jewellers also believe that this current growth in demand will continue throughout the festive and wedding season.
On Thursday (25 July, 2024), gold prices on the MCX dropped by over 1.5%, reflecting a decline in international bullion prices. Silver prices fell by more than 4% ahead of important economic data from the US.
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The MCX gold prices decreased by Rs 1,159, or 1.68%, to Rs 67,793 per 10 grams. Meanwhile, the MCX silver price decreased by Rs 3,343, or 3.94%, to Rs 81,551 per kg.
The retail price of 24 carat Gold has come down from around Rs 76,200 per 10 gram on 18th July 2024 to around Rs 69,980 per 10 gram at the time of writing today.
Advanced Festive Purchases
Customers are placing advance orders for heavy jewellery for November and December weddings, as well as for the upcoming Dhanteras and Diwali festivals. To fulfil the increased interest in gold after the recent customs duty cut, jewellers are also offering advance booking schemes for gold.
The Economic Times reported Rajiv Popley, director of Popley & Sons, a jeweller based in Bandra, Mumbai as saying that they are receiving a lot of enquiries from their customers. The first wave of demand is for Raksha Bandhan, which marks the start of the festive season that will last till Diwali. Additionally, some orders are being placed in advance for weddings in August as well.
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Jewellers are actively reaching out to customers through messages and social media to inform them about the gold prices change. They are expecting a 20% increase in demand this quarter, with the first significant purchases expected for the Raksha Bandhan festival in mid-August.
In South India, where gold comprises 40% of the country’s gold consumption, demand has seen a significant surge since last evening. Jewellers are also predicting more customers at their stores and expecting a 15-20% increase in demand for both heavy and lightweight jewellery.
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