High gold price hits jewellery sale in India

India’s retail jewellery sales have taken a significant hit over the past couple of months as high gold prices have kept consumers away from stores. The rally in gold prices to repeated new all-time highs since the start of the year has weighed heavily on the retail demand for gold jewellery. Since the beginning of the year, gold prices have climbed more than 11%, while hitting a series of record highs.

Experts and retailers said due to higher prices, consumers have been opting for lighter carat gold jewellery. The decline in rural demand, a key driver of the jewellery market, is attributed to inflation and reduced disposable incomes. This has resulted in a shift in consumer preferences towards silver and gemstone-studded jewellery, as well as alternative investment options like digital gold and sovereign gold bonds.

Reports indicate a 70-80% drop in sales nationwide, primarily due to record-high gold prices, which have led consumers to postpone purchases in anticipation of price reductions.