ACTING PRICEY

Gold prices breached the Rs 1 lakh mark in April-May 2025, subduing sales volumes but lifting revenues. Organised retailers adapted smartly. Can demand bounce back soon?

- ASHISH SINHA

GOLD PRICES in India have been on a tear of late, impacting consumer buying patterns and the jewellery retail business. In April, the price of 10 gm gold rallied across the Rs 1 lakh mark, prompted by the global economic uncertainty and a weakening rupee. The steep rise led many customers to delay purchases, which caused a 70 to 80 per cent dip in retail gold sales during the period.

Organised jewellery retailers experienced a mixed impact. While the volume of sales fell 9 to 11 per cent due to the elevated gold prices, revenue still saw a growth of 13 to 15 per cent. This was largely driven by higher price realisation per unit of gold sold. To adapt to the challenging environment, many organised players shifted their focus to lightweight jewellery pieces, offered promotional discounts, and enhanced customer service to retain footfalls and engagement.

Another emerging trend was a rise in recycled gold transactions, as more customers opted to exchange old jewellery to cushion the impact of high gold rates. This not only helped manage costs for consumers but also added to the supply chain during a tight pricing environment.

Despite these hurdles, organised players managed to soften the blow due to their emphasis on trust, purity, transparent pricing, and evolving consumer engagement strategies. The broader expectation is that as prices stabilise in the coming months, sentiment will improve, bringing customers back into stores and boosting overall jewellery consumption in the second half of the year.