‘Won’t be surprised if we run out’: Tanishq CEO says sky-high gold prices have not dampened festive demand

The festive season is in full swing and this is also having an impact on jewelery sales, as figures from Titan Company-owned jewelery brand Tanishq reveal. In the days leading up to Dhanteras and Diwali, a strong increase in jewelery demand was recorded despite gold prices reaching all-time highs. ₹1,30,000 level per 10 grams.

“Volume growth started coming after the festival season started. We saw a lot of customers staying away until Navratra and hence the volume increase was not visible,” said Ajoy Chawla, CEO of Titan’s Jewelery Division, as quoted by NDTV Profit.

Suggesting that the festive season has revived consumer sentiment and has brought back buyers who were waiting for gold prices to cool, he remarked, “But now that people have realized that the price of gold is here to stay and is going up.

Gold prices on Dhanteras 2024

In the same period last year, the price of 24 carat gold was approximately ₹78,610 per 10 grams. “All these decision makers are starting to come back. Emotions are clearly back,” Ajoy Chawla said.

With gold prices rising to a record high this festive season, the CEO highlighted the prevailing sentiment among consumers: “We are seeing a surge in gold, especially coins and bars – perhaps due to investment or FOMO. People think gold prices will rise further.” Current trends show that very high prices do not reduce demand, but instead trigger Fear of Missing Out (FOMO).

On speculation that jewelers will run out of gold bars, Ajoy Chawla said, “There is a shortage of bullion bars in the country. We have planned for this adequately, but I would not be surprised if we run out of coins. There is apprehension among customers that there may be a shortage of gold bars.”

Why is gold demand increasing despite the rapid rise in gold prices?

The World Gold Council has reported that gold demand in India is primarily driven by an increase in physical investment demand for bars and coins, based on market reports and anecdotal evidence from trade channels.

The increase in gold prices did not deter buyers from making new purchases; as gold is now widely relied upon as an investment, reportedly outpacing jewelery purchases. The renewed upward trend in prices has further strengthened expectations for further increases.