By Paul Ploumis 16 Jun 2015 Last updated at 08:35:13 GMT
MUMBAI (Scrap Monster): The gold jewellery industry in India is reportedly witnessing huge drop in retail sales, with wedding season demand beginning to subside. The number of auspicious occasions for conducting marriages in the country is likely to witness sharp decline this year, when compared with the previous year. This in turn will affect the wedding season gold demand in the country.
According to All India Gems and Jewellery Trade Federation (GJF), marriage demand constitutes nearly 80% of the overall gold demand in the country. The dearth of auspicious occasions between June and December this year is likely to impact gold jewellery sales in the country by at least 22-25%. GJF reminded that gold jewellery demand during current year may fall short of 662.1 tonnes reported during the entire year 2014. Earlier, India Bullion & Jewellers’ Association (IBJA) also had predicted 30% fall in the country’s gold jewellery demand during second half of the year.
The prediction of weaker monsoon is feared to impact gold jewellery sales. According to MET department, the probability of receiving below normal to deficient rains is as high as 93%. The rainfall in India during 2015 is predicted to be 88% of the long period average. Weaker monsoon is likely to hit gold demand in rural areas. Incidentally, rural demand accounts for nearly two-thirds of the overall gold demand in the country.
However, jewelers are still hopeful that a good monsoon may trigger gold demand starting August this year with the advent of gold purchases for marriages. The demand remains dull at present, they admit.
Meantime, gold imports by the country surged higher by 10.47% to $2.42 billion in May this year. This is when compared with the imports of $2.19 billion during the same month a year before.