Buying gold and silver on the occasion of Diwali is considered auspicious, but this time the prices of gold and silver are skyrocketing. In such a situation, the question arises whether people will buy gold and silver with the same enthusiasm this time too.
The rapidly rising gold prices have affected the sale of jewellery even before Diwali. Due to this, despite the recent reduction in customs duty, retailers are anticipating low sales.
Tremendous jump in gold and silver prices
Despite the stock market boom stopping, there has been a tremendous jump in the prices of gold and silver in this calendar year. Their prices are constantly going up. In the last 12 months, gold has given a return of more than 28 percent, while silver has given a return of more than 33 percent.
Industry experts estimate that due to these increased prices, sales on Diwali this year will decrease by 10-12 percent compared to last year.
“Global uncertainty has led to a very sharp increase in gold prices in a short period,” said Suvankar Sen, managing director and CEO of Senco Gold & Diamonds, reports Business Standard.
40 lakh weddings after Diwali
Recent geopolitical tensions such as the ongoing conflict in Israel and the Middle East have reinforced gold as a safe investment, leading to a surge in its prices. Despite these challenges, some jewellers are optimistic about this festive season. And the reason for their optimism is the nearly 40 lakh weddings scheduled after Diwali.
Custom duty reduced from 15 per cent to 6 per cent
Sayam Mehra, chairman of the All India Gem and Jewellery Domestic Council (GJC), expects Diwali sales to be around last year’s levels. The reduction in custom duty from 15 percent to 6 percent initially boosted business, but at the same time, sales have declined by 10 percent compared to last year due to the current high prices.
So should you invest in gold and silver
Colin Shah, MD of Kama Jewellery, told Business Standard, “Diwali is the time when the demand for gold and silver is high. If someone has a long-term investment plan, gold will still be a good option. Gold prices are rising due to many reasons, and geopolitical tensions are the biggest reason for this rise in gold.
Going forward, a low interest rate environment can support gold prices.” He said, “On the contrary, if someone is looking for an easy option, then silver can be a good option for him.”
Shikhar Aggarwal, Chairman of BLS E-Services, said, “Digital gold platforms have made it easy to buy, store and safely gift gold. Moreover, gold in physical form or the form of digital gold is a better asset, which is an excellent option for gifting or investment on occasions like Diwali.”