Gold rush on Deepavali defies note ban, GST impact

Many seek to buy gold, silver and utensils and invoke the gods to bring in prosperity. In several parts of the country, people also worship the Goddess of Wealth – Lakshmi. 

Jayantilal Challani, President of Madras Jewellers and Diamond Merchants Association and a partner in Challani Jewellery Mart, said, “The demand for gold and silver is good. 

This is the very first Dhanteras in the post-GST regime. Also, the impact of demonetisation and the income disclosure schemes are beginning to settle down. The footfalls in the stores are quite encouraging.” 

“During the last six-to-eight months, the sales of gold in Chennai were a bit dull. But for the past few days, in the run up to Deepavali, the demand has been good. The prices have also come down, which has come as a boost towards buying. 

On Tuesday, the price of gold hovered around Rs 2,837 per gram in Chennai,” Challani added. The Centre’s recent decision to not make mandatory furnishing of PAN or Aadhaar card details for buying jewellery in cash up to Rs 2,00,000 had also ushered in a positive sentiment among buyers. The earlier limit was Rs 50,000 as part of the anti-money laundering (AML) guidelines. 

Said TS Kalyanaraman, Chairman & MD, Kalyan Jewellers, “The Deepavali season has begun on a promising note and we are expecting a 10% to 12% increase in sales compared to last year. 

Post GST and note ban, there has been a discernible shift in the number of customers opting to buy from organised players. Apart from this, revoking of PMLA along with decline in gold rates (1 pc, compared to last month) are macro factors that will work not only in our favour but also the organ

ised jewellery industry.”  

Gold is at the centre of festivities and gifting traditions in India, particularly during Dhanteras, Diwali and the wedding season that follows. 

“Currently, gold demand seems to be recovering after withdrawal of the AML guidelines. Policy reforms in quick succession in recent years have 

targeted transparency and the industry is transitioning under GST to a more organised structure, with long term benefits,” said Somasundaram PR, MD, India, World Gold Council. 

“It appears that demand for gold jewellery and branded coins seems to be better than the past quarter, particularly in relation to organised players. 

A good monsoon and stable gold prices are encouraging consumers to make token purchases for the auspicious festivals. The ensuing wedding season, however, holds the key for the quarterly demand performance,” he added. 

All India Gems & Jewellery Federation Chairman Nitin Khandelwal said that with AML issues having been amicably resolved, buyers’ sentiments have been boosted. “Although the footballs are increasing, we do not expect any growth over last year’s sales. 

We shall be delighted even if the last year’s sales/quantity figures are achieved, coming after demonetisation, GST and RERA (Real Estate Regulatory Authority),” Khandelwal added.