Vicenza, Italy: Indian jewellers are pinning hopes for demand in 2010 on the domestic market as international destinations struggle, but extraordinary price volatility is limiting sales, even in holiday seasons.
India, the world’s biggest market for the precious metal, had made successful entry into target markets for mid-priced jewellery, but wholesalers exhibiting at Vicenza’s international jewellery trade show said uncertainty across financial markets was also mirrored in export activity.
“For the moment, all the markets are slowing down, except for India. Europe is slowing down, the US is not out of the woods yet,” said Pradeep Kumar Godha, chairman and managing director of Shantivijay Jewels Ltd, in Mumbai.
The industry-backed World Gold Council has been cautiously optimistic on the outlook for demand in 2010, pinning improvement on economic recovery driving jewellery demand and investor appetite for bullion.
Global gold demand fell 11% in 2009, hammered by a 20% drop in jewellery demand which accounted for 52% of the overall demand last year. Identifiable investment demand rose 7% in 2009.
Gold prices have surged in recent weeks, hitting record highs in dollar, euro, sterling and Swiss franc terms but the driving force behind the rally, euro zone sovereign debt worries and concern on the pace of global economic growth, is being felt on wholesale and retail markets.
Hemant Shah, director of Hammer Group, a major jewellery wholesaler, said that the uncertainty had turned attention back to Asia.
“India and China are the growing markets, it is these markets that have strong consumer activity,” he said.