India's Retail Gold Demand Slumps Amid War Uncertainty
Retail gold demand in India has been affected by the ongoing war and price uncertainty. According to Surendra Mehta, Secretary of the India Bullion and Jewellers Association (IBJA), gold sales have declined by 8-10 percent in September compared to last year. The domestic price of 24-karat pure gold has surged about 60 percent from around Rs 98,000 to Rs 1.57 lakh per 10 grams.
The war and uncertainty over prices are weighing on consumer sentiment, making them cautious about buying gold. Mehta stated that 'customers are confused with the war situation, as most of the customers understand that if the war continues, gold prices can further go down, and hence demand is not picking up inspite of the festival season ahead.'
Analysts expect a modest festive season for the jewellery industry, with consumers opting for lighter jewellery and lower quantities. Investment demand is shifting towards gold ETFs, coins, and digital gold. Renisha Chainani, Chief Research Officer at Augmont, said 'Dhanteras and Diwali are expected to post healthy value growth even if tonnage growth stays modest.'