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Gold Sales Weaken During Ganesha Chaturthi as Prices Surge
Gold jewellery sales were weaker than usual during India’s Ganesha Chaturthi festival.
Experts estimate that the amount of gold sold fell by about 15% from last year.
This happened because gold became much more expensive, so families could not afford as much jewellery.
Many people bought lighter pieces, exchanged old jewellery or purchased coins instead.
Some buyers also chose digital gold and gold ETFs, which can be bought in smaller amounts.
These investment products do not have jewellery-making charges.
Experts say people still like gold, but they are changing how they buy it.
Gold prices may move up and down in the short term.
Analysts remain positive about gold over the medium and long term.
Gold sales volumes fell by an estimated 15% during Ganesha Chaturthi.
Domestic 24K gold prices rose from about ₹69,000–₹70,000 to above ₹1,57,000 per 10 grams over two to three years.
Buyers continued purchasing gold but shifted toward lighter jewellery, old-jewellery exchanges, coins and smaller quantities.
Gold ETF inflows increased 67% month-on-month to ₹2,597 crore in August, while digital gold purchases more than doubled year-on-year.
Analysts expect gold to remain supported over the medium and long term, although prices may be volatile in the near term.
- Who
- Indian gold buyers, jewellery consumers and market analysts.
- What
- Gold sales volumes declined during Ganesha Chaturthi as consumers shifted toward lighter jewellery, coins, digital gold and ETFs.
- Where
- India, including the Ahmedabad spot market.
- When
- During the Ganesha Chaturthi period, with August figures also cited for digital gold and ETF demand.
- Why
- Gold prices have risen sharply, while making charges, GST, rupee weakness and higher import duties have made physical jewellery less affordable.
Structural Gold Support
Near-Term Price Risks
Gold price outlook
Structural Gold Support
Analysts cited central-bank accumulation, currency weakness and international conflicts as reasons for a medium- to long-term bullish trend.
Near-Term Price Risks
Higher expected US interest rates could pressure prices, while sharp recent gains could be followed by consolidation and volatility.
Meaning of weaker jewellery sales
Structural Gold Support
The sales decline reflects changing buying habits rather than reduced interest in gold; consumers are shifting toward lighter jewellery, coins, digital gold and ETFs.
Near-Term Price Risks
High prices are making traditional heavy jewellery unaffordable and could continue restraining physical gold demand during routine festivals.
Preferred investment format
Structural Gold Support
ETFs and digital gold offer smaller entry amounts, easier storage and no jewellery-making charges; ETFs also offer easier buying and selling.
Near-Term Price Risks
Digital gold does not provide the investor protections available through SEBI-regulated gold ETFs, according to the article.
Key facts
- Estimated sales decline
- About 15% year-on-year during Ganesha Chaturthi
- Recent 24K gold price
- Above ₹1,57,000 per 10 grams, compared with roughly ₹69,000–₹70,000 two to three years earlier
- Additional jewellery costs
- Making charges of 10–25% and 3% GST
- Gold ETF inflows
- ₹2,597 crore in August, up 67% month-on-month
- Gold ETF holdings
- 121 tonnes after the August increase
- Gold imports
- Down 58% to $2.3 billion
- Suggested portfolio allocation
- One analyst recommended holding 10–15% in gold, built gradually through ETFs or gold funds
Quotes
Satish Dondapati
Fund Manager for ETFs at Kotak Mutual Fund
“This shift toward digital gold, ETFs, and bullion coins will continue as primary investment avenues because they offer 100% purity, zero making-charge loss, and quick execution. Physical gold will retain its cultural status for weddings and major rituals, but routine festive and investment demand is permanently migrating to paper assets.”
livemint.com
“We remain positive on gold over the medium to long term, though prices may remain volatile in the near term. The trend towards these investment options is likely to continue.”
livemint.com
Sources
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