A rise in the price of the yellow metal since early 2016 bore its weight on sale of gold items this Akshaya Tritiya, reported Reuters. An annual Hindu and Jain festival celebrated Monday saw 35 percent lower demand compared to last year.
Since January, gold had risen by nearly Rs. 5,000 and is currently hovering around Rs. 30,000 per 10 gm. Slowing demand could mean the prices could go down soon, breaking its rally for months, said the news agency.
At around noon on Monday, All India Gems and Jewellery Trade Federation (GJF) Chairman Sreedhar GV told the Press Trust of India that positive reports were arriving from across the country. The footfalls were good, especially in the southern region, and might help clock about 5 to 10 percent growth this festival day, he added.
"We are also noticing that the off-take on coins are much less compared to last year. This year the preference is more for the wedding jewellery, as the marriage season is still on. Consumers are also going for light weight jewellery than coins," Sreedhar said.
However, Kumar Jain, vice-president of the Mumbai Jewellers Association, lamented later that the demand were less than a third of 2015. Hopes of pick up were high as jewellers had opened shop recently after many weeks of protest on 1 percent excise duty on sale of gold jewellery.
"Higher price is the key deterrent. We thought pent-up demand would drive sales, but demand is quite weak," he told Reuters.
To boost sales momentum that has remained weak since the strike, jewellers have been on an aggressive advertising spree, said Somasundaram PR, India head of the World Gold Council.
Reuters quoted Mangesh Devi, a jeweller from Maharashtra's Satara town, as saying that extremely dry weather condition kept away farmers from buying gold.