Akshaya Tritiya may lose sheen

Mumbai: The government policies and general elections are likely to play dampener for the overall jewellery business during this Akshaya Tritiya on May 2, considered one of the most auspicious day to buy gold, feels the industry. “Due to the ongoing Lok Sabha elections, the general sentiment for bullion is weak. So we may see not momentum during Akshaya Tritiya this year. In 2013, the price was very attractive,” All India Gems and Jewellery Trade Federation (GJF) chairman Haresh Soni said.

However, the industry is still optimistic as gold prices are ruling steady and expects sales, he said. “We are optimistic as the momentum has already begun in places where elections are over. We are expecting jewellery sales in small denominations,” he added. Echoing similar views, Gitanjali Gems chairman and managing director (MD) Mehul Choksi opined that due to government policies in order to restrict gold imports, there are not enough stocks in the market for the festival demand.

“The curbs imposed by the government to restrict gold imports in order to control current account deficit has resulted in lack of enough stock in the market. This is going to affect the demand, which might be even half of last year,” he said. Further, he said the general elections might play dampener on overall sales as people are waiting for formation of new stable government, which will give a direction to the market.

Naveen Mathur of Angel Broking said that the general sentiment is negative for gold in the country and owing to that the sale is likely to be similar or little less than last year.

“The general trend is that people are waiting for the election results (which are due in the third week of May) to see where the market is moving. Moreover, the prices are steady with no indications of moving upward for the time being, creating a negative sentiment among consumers,” he added.

However, Tara Jewels chairman Rajeev Vasant Sheth said this year the pre bookings are looking good, and is pretty similar to last year. “We are expecting demand for gold to be like that of last year during this Akshaya Tritiya. Due to sudden decline in prices last year, the demand for gold shot up during April-May last year. This year the prices are ruling steady and pre-bookings are good and are looking much similar to last year,” he said.

According to World Gold Council, the demand continues to be robust even as the government policies continue to haunt the industry.“Last year, this time there was a huge drop in gold prices. This gave a huge boost to the demand. This year its not going to be like what it was last year as the government policies like higher import duty, 80:20 scheme and banks not being allowed to sell coins are haunting the sector in a big way. However, the intrinsic demand continues to be robust,” WGC managing director (MD), India, Somasun-daram P.R. said. Even as there are no overwhelming factors, the imports have improved and there is a far more congenial atmosphere which looks positive for gold, he said.