MUMBAI: Keen to prop up faltering sales, India's leading jewellery retailers are offering schemes that encourage customers to invest their savings in gold through regular small purchases and get protection from price volatility. Gold has risen $400/ounce between July and August and more than 30% over last year, depressing jewellery demand. Gold demand typically shoots up in September, with the onset of the festive season, and peaks in spring during the wedding season. However, this year urban consumers are preferring coins and bars for investment over jewellery. In rural India, where almost three quarters of the bullion is sold, demand is likely to remain depressed as net returns from farming drop and cost of living rises. Three-year-old chain Reliance Jewels, a subsidiary of Mukesh Ambani-owned Reliance Retail, plans to launch a scheme in October that will allow a consumer to invest any amount daily for a year and then buy gold at the rate prevailing on maturity. A consumer can also opt to buy fractional quantities of gold everyday for a year under the scheme and can get jewellery equivalent to grammage accumulated over time upon the scheme's maturity. His purchase thus becomes independent of gold price fluctuations. The retailer, which sells gold and studded gold jewellery from 30 outlets across the country, currently runs a monthly gold savings scheme called Golden Steps. Under the new scheme, periodic quantity investing, especially during times of high volatility, will allow people to accumulate more gold when prices are lower and therefore average out their costs in the long run. "It's similar to a pygmy deposit scheme, where bank-appointed collecting agents collect small amounts from people everyday and deposit them into individual bank accounts to encourage saving and meeting future expenses," said Bijou Kurien, president & CEO - lifestyle, Reliance Retail. "The scheme will encourage people to invest small amounts into gold every day, rather than being locked into a price every month. On maturity, they can buy gold at the prevailing rate or get the quantity (grams or fractions) they locked into periodically for the past one year. The details of the scheme will be announced shortly." In this month alone, gold has soared from Rs 26,000/10 grams to Rs 28,000 on fears of a global double-dip recession due to problems in the US and Europe. Another grammage accrual scheme, Swarnanidhi, launched in June by leading jeweller Tanishq across half of its 130 stores countrywide, will be extended to other outlets by September. A two-year scheme, it entails investors depositing a minimum of Rs 1,000 and its mutiples once a month. Gold in grammage at the prevailing rate is credited to the customer's account every time a payment is made and upon maturity, a customer can buy jewellery equal to the accumulated quantity over the life of the scheme. "The grammage scheme will help consumers get a certain amount of gold at the end of a scheme independent of the gold price fluctuation (over its tenure). We believe this is a good way to encourage investment in jewellery at a time of wild price swings," said Sandeep Kulhalli, vice president - retail and marketing, Tanishq.

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