Gold Price Correction Sparks Dhanteras Jewellery Rush as Retail Sales Value Climbs up to 30 Percent

Indian jewellery retailers experienced strong footfalls and resilient consumer demand this Dhanteras, as an 8% to 10% pullback in domestic bullion prices from recent peaks offered timely relief to festive buyers. Nationwide sales of gold and silver during the auspicious festival are estimated to have crossed Rs 66,000 crore, up approximately 10% from around Rs 60,000 crore in the previous year.

Although absolute sales volumes remained largely flat to moderately higher due to elevated baseline prices, retail revenue surged. Industry bodies and major listed retail chains reported value growth between 20% and 30%, supported by wedding shopping, old gold exchanges, and rising uptake in Tier-II and Tier-III cities.

Price Softening Triggers Retail Rebound

Domestic gold prices saw a welcome dip in the run-up to Dhanteras. At major centres like Mumbai, 22-carat gold eased by Rs 235 per gram to trade around Rs 13,150 per gram on Dhanteras day, down from Rs 13,385 the day before, giving fence-sitting retail buyers an incentive to lock in purchases. In Mumbai's premier bullion hub, Zaveri Bazaar, jewellers reported footfalls and enquiries up to 40% higher than last year.

Rajesh Rokde, Chairman of the All India Gem and Jewellery Domestic Council (GJC), noted that the decline in gold rates significantly boosted festive sentiment. While high overall unit prices kept volume growth flat compared to the previous festive season, Rokde highlighted that sales value jumped 20% to 30%, cushioned by household savings and the festival falling right after monthly salary disbursements.

Sachin Jain, Regional CEO (India) at the World Gold Council, observed that the price moderation helped stimulate retail demand, particularly from families planning wedding ceremonies over the upcoming three to six months who chose to advance their purchases.

Product Preferences: Lightweight Ornaments, Diamonds, and Coins

Faced with elevated gold rates relative to previous years, Indian consumers adapted their purchasing patterns:

• Lightweight and Lower Caratages: Retailers noted robust migration towards 18-karat, 14-karat, and 9-karat daily-wear items such as lightweight chains, bangles, and pendants, allowing consumers to stay within predetermined budgets.
• Investment Bullion: Demand for smaller denominations of gold and silver coins—particularly in the 1-gram to 5-gram range—remained exceptionally brisk. Quick-commerce and digital platforms also saw exponential increases in coin deliveries.
• Silver and Diamond Traction: Younger consumers increasingly turned to silver jewellery and artefacts for secondary wedding rituals and festive gifting, driving value growth of around 30% in silver. Diamond-studded collections also saw strong double-digit growth.

Organised Jewellers Outperform

Major retail chains registered solid revenue expansion during the festive window:

• Kalyan Jewellers: Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers, highlighted strong footfalls driven by transparent national pricing and noted that non-metro markets in Tier-II and Tier-III regions emerged as major drivers of consumer demand.
• Senco Gold: Suvankar Sen, Managing Director and CEO of Senco Gold Ltd, stated that the company was on track for revenue growth exceeding 20% to 25% year-on-year. Sen cited a 25% to 30% expansion in diamond jewellery sales and greater customer appetite for contemporary, versatile designs.
• Kama Jewelry: Colin Shah, Managing Director of Kama Jewelry, observed an approximate 10% spike in Dhanteras jewellery sales, led by 18-karat studded items, which accounted for roughly half of their festival turnover.

Market Outlook for Investors

The festive performance underscores the underlying strength of domestic consumption and the structural shift towards organised retail jewellers. With the Indian wedding calendar extending across the next two quarters, retail margins are likely to remain well-supported by higher-margin studded jewellery sales and steady showroom expansions, even as bullion price volatility continues to test consumer price sensitivity.