Gold prices dip, but shoppers aren't ready to splurge

Gold prices have dropped by nearly 4% in the past month, reaching around Rs 1.47 lakh per 10 grams from Rs 1.53 lakh, sparking selective purchases as consumers weigh the benefits against overall costs. Industry insiders highlight a shift towards lightweight designs, studded pieces, and old-gold exchanges, as indicated by Aspect Bullion & Refinery CEO Darshan Desai.

The market remains price-sensitive, with volatility likely to continue due to factors such as US economic data, Federal Reserve announcements, and currency fluctuations.

Despite these price fluctuations, jewellery demand remains robust across various price segments, according to CaratLane's Saumen Bhaumik. Consumers are becoming more deliberate with their spending but still show interest in value-conscious and premium jewellery. The extended festive and wedding season, coupled with a sustained appetite for diamonds and everyday jewellery, maintains a positive market sentiment.

Mangesh Chauhan, Sky Gold & Diamonds' managing director, expects strong demand throughout the festive and wedding calendar, driven by healthy business-to-business orders from wholesalers and ongoing store expansions by retailers. He notes that despite elevated prices, recent price stability has bolstered consumer confidence in planning purchases.

Chauhan emphasizes the growing preference for affordability without sacrificing design, citing the popularity of lightweight, lower-carat, and design-focused jewellery. Studded jewellery is also gaining traction among younger buyers, prompting manufacturers to expand their offerings in this area.

Supriya Kataria, founder of Kumari Fine Jewellery, explains that rising gold prices are making consumers more selective but not preventing them from purchasing jewellery. Buyers are increasingly evaluating factors like prices, making charges, promotional offers, and exchange values, with brand trust playing a crucial role in their decisions.

This trend is expected to be more pronounced in discretionary purchases, while weddings, festivals, and family milestones remain key drivers of demand. Old-gold exchanges are becoming vital tools for managing purchase costs, enabling households to leverage the value of their existing jewellery for new acquisitions.

As the festive and wedding calendar extends over the coming weeks, industry experts anticipate sustained demand, albeit with longer purchase decision cycles as consumers balance emotional spending with budget constraints. The focus is shifting towards maximizing design and value for each rupee spent, rather than simply accumulating more gold.