Surging gold prices take sheen off jewellery sales in festive season

Kolkata: Jewellery sales this Dussehra were largely unchanged from a year earlier, as record-high gold prices dampened festive demand and prompted consumers to shift towards 9-carat gold and diamond-studded designs, industry executives said.

The subdued trend followed a 15% year-on-year fall in gold sales by volume during Ganesh Chaturthi a month earlier. Jewellers are now counting on Dhanteras, a key gold-buying occasion, to revive demand.

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Mumbai-based Kama Jewelry managing director Colin Shah said buyers were seeking value without giving up the tradition of buying gold on auspicious occasions. Demand for lightweight jewellery and 9-carat gold gained traction, particularly among young and first-time buyers, while natural and lab-grown diamond-studded jewellery saw increased interest in the Rs 1.5-3.0 lakh price range. Overall, sales were similar to last year in value, he said.

The price of gold climbed to Rs 1.48 lakh per 10 gm this Dussehra, up 35% compared with Rs 1.10 lakh last year. "Consumers are increasingly looking for pieces that can transition seamlessly from everyday dressing to festive occasions, rather than investing exclusively in heavier, occasion-specific jewellery," said Neil Sonawala, MD of Zen Diamond India.

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Diamond studs, delicate pendants, stackable rings and understated earrings were attracting buyers looking for versatility and everyday wearability.

Interest in 9-carat and 14-carat gold jewellery was also rising as consumers sought more accessible price points. Lightweight and studded jewellery accounts for 65-70% of Zen Diamond India's catalogue and was the biggest contributor to its festive growth, Sonawala said.

Financing and gold-exchange schemes also helped drive purchases, allowing customers to spread payments or use old jewellery to fund new designs. The shift towards contemporary, wearable pieces was visible across age groups, including consumers aged over 55 who were exchanging older jewellery for modern designs, he said.

Lab-grown diamonds saw a sharp rise in demand. Limelight Lab Grown Diamonds tripled its sales year-on-year during Dussehra while doubling its store network, MD Pooja Madhavan said.

Consumers were increasingly buying diamond jewellery for personal use and weddings, rather than treating it solely as an asset to be stored away, she said. "Tier-2 and tier-3 cities are emerging as important growth markets for lab-grown diamonds," Madhavan said.