High gold prices give jewellers a silver lining

In India, the soaring gold prices are creating a silver lining for jewellers. With the cost of 24-karat gold exceeding Rs 1.5 lakh for 10 grams, many middle-class consumers are shifting their focus to silver products. Silver, traditionally considered the secondary metal to gold in traditional Indian jewellery, is now becoming a prominent choice, especially during the festival season that commences with Navratri on October 11.

Jewellers and industry experts believe that silver is poised to capture a larger share of jewellery purchases during this period. Nagnesh Pachchigar, a third-generation diamond jeweller based in Surat, reported that silver now contributes up to 35% of his annual revenue. He anticipates that silver sales could account for as much as 40% of his sales during the festive season.

Surendra Mehta, the national secretary of the India Bullion and Jewellers Association, anticipates a 17-18% increase in silver purchases during the Diwali season, compared to the same period last year. The government eased silver import restrictions in July, which has led to a surge in imports. In August, silver imports reached over $1 billion, marking a 127% increase compared to the previous year. This eased supply constraint is further fueling the growing popularity of silver among Indian consumers.