[ad_1]
With staying at home becoming the new normal and most Indian jewelers closed due to a national closure, Mamta Vinay Gokarn faces a dilemma: how to get gold on the second most auspicious day of the Hindu calendar to buy the metal.
Purchases of valuables, including bullion, at Akshaya Tritiya, celebrated on April 26 this year, are believed to bring luck and prosperity to the country’s majority Hindu population. Gokarn, who lives in the city of Pune in western India, has bought gold bars on auspicious days for the past decade, mainly from his local jeweler.
“This Sunday I wonder how to buy gold,” he said by phone. “Buying online is not an option for me as it is too risky to trust and I don’t know how delivery will work. From past experience, I have also seen that the cost of buying gold from bigger brands or banks is higher than what I’d pay at a local store. “
Demand at the world’s second-biggest gold buyer had already been hit by record prices and slowing growth, with sales underway for the worst year in at least a quarter of a century in 2020. More bad news is looming as The country’s economy may be heading for its first year-long contraction in more than four decades after Prime Minister Narendra Modi extended the world’s largest blockade to May 3 to combat the coronavirus pandemic.
The credit rating agency ICRA Ltd. estimates that typical demand during Akshaya Tritiya will range between 20 and 25 tons, representing around 4% of the country’s total annual consumption. That may not happen this year, as sales may be significantly affected, Vice President K. Srikumar said.
Akshaya Tritiya’s pre-season blockade will be negative for gold retailers in the short term as, apart from store closings, there have been disruptions in the supply chain with restrictions on the movement of non-essential goods, Srikumar said .
Weak rural demand
While jewelers focus on online sales, as stores remain closed, challenges abound. Most Indian gold buyers live in rural areas that may lack reliable internet connectivity and banking services, and the most tech-savvy still prefer to see the gold in person before making their purchase.
“India’s demand for gold was already low due to the higher price. We now face an additional challenge of slower economic growth, “said Madhavi Mehta, senior analyst at Kotak Securities Ltd.” As online platforms develop, the main gold purchases in India are concentrated in the rural sector and there may not be much appetite for them. These products.”
Rural India, where nearly two-thirds of the nation’s 1.3 billion people live and accounting for 45% of gross domestic product, has been in trouble for many years, following consecutive droughts and a surprise cash ban in 2016 Now you are facing more challenges due to the blockade.
Still, many jewelers trust some consumers to shop online from home to fulfill tradition. India’s largest jeweler, Titan Co., has said that more than half of its regular Akshaya Tritiya buyers have expressed interest in buying gold that day, while Kalyan Jewelers, backed by Warburg Pincus LLC, said it has been ” flooded with doubts about buying gold on the auspicious day. ” “
Although the delivery of non-essential goods is not currently permitted by the government, jewelers offer consumers the option to lock their products on the day and take them home at a later date.
As for Gokarn, who makes an average purchase of five grams during Akshaya Tritiya each year, the options look bleak and this time he may not be able to keep the tradition alive. As a last attempt, “I am planning to ask my brother in my hometown in Goa to shop in Khayyam Tritiya for me, if the stores open there because some of the restrictions have been relaxed in the state.”
This story has been published from a source of the cable agency without modifications to the text.
