Gold sales in India rose to 50 Tonnes in October 2008 due to large scale promotions, low prices of gold, and festive and marriage season in India.
The All India Gems and Jewellery Trade Federation (GJF) reported an increase of 66.0% in the gold sales from October 1 to October 20, 2008, over the corresponding period in 2007, as per the news published by thefinancialexpress.
The sales of gold went up to 50 Tonnes during the first 20 days of October 2008, as compared to 80 Tonnes sold in the entire third quarter of 2007. Sales of gold during the festive season are observed to be fragmented, recording an overall increase of 15-20% over the previous year.
The major reason for increase in gold sales in India was the large scale promotion campaigns organized by the retailers across 217 various Indian cities. Further, lower gold prices and the festive season jointly served as a big opportunity for the Indian consumers to purchase gold.
Moreover, from the point of view of investment, gold enjoys a favorable position among the Indian consumers and thus, this contributed towards the rapid growth in gold sales. Despite the economic volatility, metropolitans recorded an increase in gold sales. Sales have been excellent in urban and semi-urban cities too.
Furthermore, the current phase of credit crunch has been grimmer and vastly spread. To meet the margin calls, funds were forced for selling most preferred assets like gold. On the other hand, US dollar was lifted up by the loosening European economies, which, in turn, led the gold prices - dominated by dollar - to lower down. Consequently, the gold is witnessing an increase in sales.
The positive approach of consumers towards gold is likely to carry on during the remaining months of 2008, with the sales rising again. Taking advantage from the marriage season, this trend would probably continue till Jan-Feb 2009.
According to a Research Analyst at RNCOS, “Gold sales went up during the first twenty days of October on account of festive season, backed by the fall in prices. Further, gold sales are rising despite economic crisis since people are looking it upon as an excellent investment opportunity. Also, the marriage season will keep this growth rate up in the subsequent months, maintaining the strong sales in near future.”
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