Lockdown to hit physical gold sales this Akshaya Tritiya, but digital gold sales may hit record high

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Gold buying on Akshaya Tritiya this year may be muted as lockdowns in about 20 states have forced most shops to remain shut. ‘Akshaya Tritiya’ is considered to be an auspicious occasion to purchase gold and gold commodities, including jewellery. However, the demand for physical gold is likely to be hit by the pandemic led restrictions.

On the other, hand analysts are foreseeing record high sales of digital gold this time.

Gold prices are on an upward move after declining 15-20% from record highs seen in August 2020, helped by the weak jobs data, softness in dollar. Gold prices have also historically performed well amid high inflation.  Such periods are typically characterized by low-interest rates and high financial stress, all of which tend to boost demand for gold.

On the Multi-Commodity Exchange (MCX), June gold contracts dipped 0.15% to Rs 47,365 for 10 grams at 9.55 am on Friday. In fact, the gold price in India is almost at the same level as was seen during the Akshaya Tritiya 2020.

The price of gold per ten gram is currently at around Rs 47,000 after having recovered from the lows of about Rs 43,000 in the recent past.

Amid the pandemic-induced lockdowns, gold retail outlets from across the country are nudging customers to buy gold and jewellery online. They are also wooing customers by giving attractive offers.

Akshaya Tritiya Offers By Jewellers

Tanishq’s ‘Akshayam’ offer on this occasion is giving up to 25% off on making charges of gold and on diamond jewellery value.

PC Jeweller in its festive offer, is extending a discount of flat 25% on diamond jewellery and making charges of gold jewellery. Additionally it is giving 10% off on making charges of gold coins.

CaratLane has introduced a Flat 20% Off on Diamond Prices of 3000+ designs for Akshaya Tritiya 2021. From bestsellers to new additions, the majority of the diamond designs is covered under this offer, including all jewellery categories. They are also incentivising  diamond studded purchases above 60k with an extra 3% off.

Senco Gold and Diamonds are also offering Rs 200 off per gram of gold on pre-booking and up to 100% off on diamond jewellery making charges. They are also are also offering shopping through video calling facility, browsing through E-catalogues, virtual trial rooms and home delivery for cities where shops are open partially.

According to commodity experts, this is a good opportunity for the precious metal buyers on Akshaya Tritiya as the overall outlook of gold is still bullish. They said that gold price outlook for short-term, mid-term and long-term all looks positive and advised investors to keep on accumulating on every dip.

Online demand for gold to surge sharply

Anuj Gupta, Vice President — Commodity & Currency Research at IIFL Securities said, “This year we will see a record purchasing in Digital Gold and Gold ETFs. The soon to launch Sovereign Gold Bond series will also attract investor. This year we are expecting subdued physical gold demand, but a record dealing in digital gold and Gold ETF. Last year we noticed 75% lower physical demand of gold on Akshaya Tritiya due to the lockdown in first wave. This year we expect to see the same trend.”

Even jewellery majors are expecting online demand to rise offsetting near nil footfalls.

Avnish Anand, COO has said, “Unlike other years, most of our stores are closed for Akshaya Tritiya this year. However, we are seeing a steady increase in online traffic. More people are browsing online and requesting for WhatsApp video calls to see the jewellery. There’s high intent shown not only in our sub 30k category but also 40k and above category. There has also been a substantial increase in demand for kids jewellery, engagement rings and other gifting purposes. The signs are positive and we are equipped to serve the demand through our digital channels”.