Gold sales growth has been around last year's level so far during the festival season, but traders and analysts expect demand to increase significantly before Diwali. The uptrend will continue through the next marriage season, traders said.
"Sales have gone up, say 20-25 per cent, during this Navratras but it is nothing significant compared to the sales this time last year," a Delhi-based gold trader said.
Traders attributed the slack demand to volatile prices -- from an all-time high of Rs 13,670 per 10 gm to a low Rs 11,800 per 10 gm -- during the last few months. Gold was trading at Rs 13,400 in the Delhi bullion market.
"The spark in demand for gold has not been that dramatic this season. The main reason behind the slow pick-up in demand is the volatile price movement," said Suresh Verma of Delhi-based Om Jewellers.
"Consumers are hesitant and are keeping a wait-and-watch policy, expecting the prices to go down further," he added.
World Gold Council (WGC) Director Dharmesh Sodah said as the gold prices are in a declining mode, it should have a positive impact on sales. "People who were holding back during the first half of the year will buy now," he noted.
"There is a pick-up in demand during the 'Navratras', a positive sign and we expect the demand to increase considerably by Diwali and sustain throughout the marriage season," he said.
Last year during the first half gold sales were very good compared with the second half, Sodah explained.
He said, "This year the first half was slow as purchases were held back due to high prices. However, we expect the purchases to materialise during the second half."
Gold prices on Tuesday saw an increase of about Rs 520 to Rs 13,400 per 10 gm due to firm global trend.
