Gold demand loses lustre after initial surge, the second half could be better than the first half

Gold jewellery industry in India is currently undergoing a slowdown phase due to a sharp increase in import duty coupled with sustained rise in inflation that squeezes disposable savings for the average middle class.

Global economic uncertainty in the wake of dwindling post-Covid financial recovery has faded lustre in the gold jewellery industry with sales remaining weaker worldwide. In India too, the scenario is no different. After a robust April-June quarter with a sharp recovery in India's economic activity, retail jewellery sales plunged in July due to the onset of the monsoon rainfalls which drew activities in the field for kharif crop sowing. The rural economy especially moves to sowing, planting and replanting of agriculture crops for harvesting in the September-November period. As a consequence, activities around the jewellery business cools down.

Organised sector gains market share

Consumer sentiment turned around with a positive tone after the first half of April and continued until June-end. All major companies including Kalyan Jewellers, Tanishq and Waman Hari Pethe, among others, posted a sharp increase in their retail jewellery sales. "The recently concluded quarter has been a positive one for Kalyan Jewellers, having witnessed continued robust momentum in both footfalls and revenue across all our markets in India and Middle East. We are continuing to see strong operating momentum in our business in India, driven by the resilience of our category,' said V Swaminathan, Chief Financial Officer, Kalyan Jewellers.