Dhanteras and Diwali demand for gems and jewellery is expected to remain robust this year, with Diwali sales projected to exceed US$ 3.57 billion (Rs. 30,000 crore) in the domestic market, according to industry experts. Price increases in precious metals are prompting consumers to perceive gold as a reliable asset, while silver is becoming increasingly popular due to its lower price and significant industrial demand. Some analysts anticipate a sales growth of 10-15% YoY, although volume may decline. Silver has emerged as the top performer, delivering returns exceeding 40%, followed by gold at 23%, outpacing stock market benchmark returns.
The Eastern Regional Chairman of the Gems and Jewellery Export Promotion Council (GJEPC) noted that gold continues to attract attention amid global uncertainties, while silver appeals as a more affordable option. There has been a notable shift from diamonds to gold this year, driven by the rising popularity of lab-grown diamonds, which has affected natural diamond demand. Industry representatives, including Ashok Bengani, President of the Ankurhati Gems and Jewellery Manufacturers Welfare Association, emphasised the need for the Finance Ministry to reduce gold import duties from 15% to 9% to enhance market sustainability. Despite rising prices, optimism remains high, with anticipated 10-20% sales growth. Motilal Oswal Financial Services Ltd (MOFSL) projects silver prices could exceed gold, with targets of US$ 1,487.62 (Rs. 1,25,000) for silver and US$ 963.98 (Rs. 81,000) and US$ 1,023.48 (Rs. 86,000) for gold in the medium and long term, respectively, influenced by geopolitical tensions and shifting market conditions.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.