India's Retail Gold Jewellery Sales to Dip by One-Fourth

SEATTLE (Scrap Monster): The gold jewellery sales in India are expected to fall by as much as 25% in the fiscal year 2020-’21, said India Ratings and Research (Ind-Ra) in its latest research report. The reduced sales during the extended lockdown period as the drastic decline in disposable income of consumers are cited as the key reasons for the notable decline in sales.

The report noted that anticipated spike in demand in connection with marriage and festival seasons during the first quarter was completely washed out, due to the lockdown. The demand had witnessed substantial decline even before the lockdown, mainly due to slowdown in economy and spiralling gold prices. Going forward, the retail gold jewellery demand is expected to remain muted during the first half (Apr-Sep ’20) of the fiscal, whereas a sharp recovery is expected during the third quarter, Ind-Ra report said.

The year-on-year decline in retail jewellery revenues is currently projected at around 25%. Any further extension of restrictions will force downward revision of the estimates. The volatile gold prices are likely to hurt consumer sentiments, which in turn may lead to deferment of new gold jewellery purchases.

Ind-Ra states that gold imports by the country, primarily driven b y jewellery sector demand, is likely to hit the lowest level in almost a decade in FY21.

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