Gold jewellery demand could remain subdued during India’s festive season as high prices and weak rural conditions weigh on purchases. However, jewellers are counting on natural diamonds, lighter designs and alternative metals to support sales.
Prithviraj Kothari, president of the India Bullion and Jewellers Association (IBJA), said weak rainfall in several states could affect demand for gold and silver. He added that the upcoming festival and wedding seasons could provide some support.
“Some pressure is there on gold. The demand also, if you see in India, there are many states where rainfall is below average, so it also affects gold and silver in the domestic market. We hope that the marriage season and festival season ahead will bring some demand,” Kothari said.
Gold prices have remained at a discount since the Prime Minister’s announcement in May. Demand is expected to pick up after the first Navratri, with lower prices potentially encouraging consumers to make purchases during the festive season.
The near-term outlook remains challenging. Kothari expects India’s gold and silver imports to decline by around 10-15%, citing weak agricultural conditions and tight liquidity. He also expects silver demand to improve if prices fall to around ₹2 lakh per kg.
Diamond jewellery offers some relief
The outlook for natural diamonds is more encouraging, with manufacturers reporting better demand as prices stabilise. Chetan Mehta, chairman and managing director of Laxmi Diamonds, expects natural diamond jewellery demand to grow by at least 15% in volume terms this festive season compared with last year.
Consumers are showing a preference for lightweight diamond jewellery, including necklaces and bangles, as they seek more affordable purchases. Manufacturers are increasing their focus on lighter designs to cater to this demand, Mehta said.
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Lab-grown diamonds are also attracting younger buyers, while coloured gemstones such as rubies, emeralds and sapphires are increasingly being incorporated into diamond jewellery.
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Jewellers expand affordable options
Saiyam Mehra, director of Unique Chains, expects gold jewellery demand to remain subdued amid high prices and geopolitical uncertainty. He indicated that demand by value could decline by 20-25% compared with last year, although the period between Navratri and Diwali could provide a temporary boost.
Retailers are responding by offering more 18-carat and nine-carat gold jewellery alongside traditional 22-carat products. Smaller sets and lighter designs are also gaining acceptance as buyers manage their budgets.
Mehra said Unique Chains has expanded its platinum jewellery range and plans to introduce silver jewellery as part of its multi-metal strategy. The move is aimed at giving customers more choices and helping retailers attract a wider range of buyers.
Men’s jewellery is another area showing promise. Mehta expects the segment, particularly diamond-studded chains, bracelets and rings, to grow by 15-20% annually.
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Festive season outlook: Gold jewellery demand may weaken, natural diamonds gain ground
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