Gold sales are expected to have crossed 25 tonne in volume terms in India on Akshaya Tritiya this year, as compared to 17 tonne last year.
Akshaya Tritiya, the biggest gold buying festival in India, triggered a mad rush for the precious metal on May 13. Jewellers in Mumbai reported a double-digit jump in sales over last year, with customers showing a strong preference for heavy, thick-set ornaments, gold bars and coins.
Initial estimates from the industry have pegged sales at around 4 tonne in the island city of Mumbai alone, while in Kolakata, gold weighing about 500 kilo was sold in 3 hours flat on the auspicious day.
Across Mumbai, though jewellery stores were closed all of last week, opposing the Local Body Tax to be imposed in the city, most of the stores opened up early on Monday, decked with marigold flowers and twinkling lights.
Akshay Tritiya is one of the auspicious three-and-a-half hugely lucky days on the Hindu almanac. While several millions of couples tied the knot, given that the entire day is termed auspicious and one does not have to really look at a certain auspicious hour to get married, several thousands took delivery of new vehicles or purchased property on the occasion.
Retailers said the jump in demand for gold was warranted given the softening of prices of the yellow metal. The price of gold now stands at $490.95 (Rs 26,800) per 10 gram against $540.54 (Rs 29,500) per 10 gram quoted last year, on the same day.
However, India's apex bank is keeping an eagle eye on gold sales and has already initiated curbs on import of the precious metal on May 13. "Despite the fact that Big Brother is watching us and our trade, there is no accounting for the Indian consumer who just can't have enough of the thrill of purchasing more gold," said a prominent jeweller in Mumbai.
With the price of yellow metal down nearly 20%, consumers flocked retail outlets to buy jewellery pieces. Some jewellers in Mumbai reported an increase of up to 70% in sales from the last year, although several retail outlets turned down customers who did not have proper banking identifications, fearing violation of RBI guidelines.
Mehul Choksi, chairman at Gitanjali Group said demand was exceptionally crazy in the latter part of the day. "It was exceptionally high in the afternoon too, but turned maniacal towards evening, as the sun wound down. In volume terms, it is nearly 50% higher than in any normal year," he said.
Kumar Jain, Mumbai Jewellers Association's Vice Chairman said, "Looking at the rush, we are expecting around 25 tonne sales in volume terms, as compared to 17 tonne last year."
Choksi added that sales across India are estimated to have jumped to 350 kilo worth $22 million (Rs 1.2 billion) by 3 pm om Monday.
For jewellery brand Orra, purchase had surpassed last year's Akshaya Tritiya sales by mid afternoon on Monday. "This is going to be a fantastic year for traders. Customers are thinking that the price of gold has bottomed out, hence demand is fabulous," said Vijay Jain, the retail chain's CEO.
Gold prices fell by $3.29 (Rs 180) on Monday to $503.96 (Rs 27,520) per 10 gram in the Capital, New Delhi, after reaching a peak of $603.97 (Rs 32,975) per ten gram in November 2012. Jewellers in the state said they have made a brisk business to the tune of $7 million on the occasion of Akhsaya Tritiya.
Most retailers that Mineweb spoke to said retail purchases got a boost given the dip in price, with almost all jewellers saying sales recorded over 15% growth as compared to last year.
The cities of Delhi, Mumbai and Coimbatore witnessed maximum buying. Trading in gold ETFs also rose by 14% to $126 million (Rs 6.9 billion) on the National Stock Exchange on Monday.
PE Mathai, CEO of Muthoot Precious Metals Corporation said though the recent price fall of gold had triggered heavy purchases a fortnight ago, the auspicious tradition of buying gold on Akshaya Tritiya day remains strong. This, he said, was evident from the significant jump in gold sales witnessed during the past two days across all the retailers branches.
"Due to current prices, the demand for gold has been investment friendly. We are seeing increased sales of gold bars and coins. Looking at the upbeat mood, we expect to see a further increase in demand this month," he said.
Bachhraj Bamalwa, former chairman of the All India Gems and Jewellery Trade Federation said with gold prices sliding by about 5% over the same day last year, sales were driven primarily by the lower rate. "We expect sales across the nation to be up by about 15%-25% in volume terms this Akshaya Tritiya as compared to last year," he said.
Retailers said they expect gold imports during the April-June quarter to swell to around 184 tonne from 153 tonne in the same period last year. However, this would immediately catch the attention of the Reserve Bank of India, which has already imposed curbs on the import of the precious metal.