This Diwali smaller gold coins are trending in customer sentiments. As gold prices have soared by a significant 20% this year, people who feel the pinch are going for smaller coins of 1 gram, 2 grams, 5 grams and 10 grams, according to jewellers.
Gold price stood at Rs 62,400 per 10 gram on Wednesday, compared to Rs 52,000 per 10 grams during last Diwali.
The sales of smaller coins is reportedly up by as much as 30% as compared to last year, while demand for 50 and 100 gram gold bars has nearly halved.
“Thanks to the rise in prices, consumers who tend to regularly make investments in gold on auspicious muhurat days are now buying gold of lesser value in the form of smaller coins and bars ,” said an Ahmedabad-based bullion trader.
Consumers who tend to regularly make investments in gold on auspicious days are now buying gold of lesser value in the form of smaller coins and bars. The demand for coins of higher volume i.e. those up to 20 grams and above has fallen significantly as against previous two festival seasons.
The yellow metal prices have remained high reportedly due to the escalating geopolitical tension in West Asia. Volatility in global equity markets has also pushed up gold prices.
According to jewellers, gold jewellery sales are relatively slow and only those who have an occasion lined up in their family are buying gold. Jewellers also said exchange-based transactions have also increased.
“At least 50% of gold purchases are made through exchange of old gold and this is a clear function of rise in yellow metal prices,” said an Ahmedabad jeweller.
Gujarat has typically seen high demand for gold coins, bars and ornaments during Diwali season.
Pushya Nakshatra and Dhanteras are auspicious occasions when people buy gold and silver in huge volumes. Last week on Pushya Nakshatra, people largely went for smaller coins. Unlike the past 2-3 years, this year maximum people bought gold coins of 2,5 and 10 grams due to higher prices. Sale of 50 gram bars and 25 gram coins have reduced by around 50% this year. Most people from middle income groups buy small gold coins regularly to invest in gold.
Gold prices increased sharply after Covid and since then, jewellers started selling gold coins as small as 0.50 grams. The demand for mined diamond jewellery has also been sluggish compared to the previous year, leading to a decline in prices for 1-carat and above mined diamonds by approximately 30% over the past year. In contrast, lab grown diamonds and diamond jewellery have experienced significant success.