'Won't be surprised if we run out': Tanishq CEO says sky-high gold prices have not dampened festive demand

The festive season is in full swing and the impact can be seen on jewellery sales too, as revealed by figures of Tanishq, jewellery brand owned by Titan Company. The days leading to Dhanteras and Diwali recorded a strong surge in jewellery demand despite gold prices reaching all-time highs of ₹1,30,000 levels per 10 gm.

“Volume growth has started coming in after the start of the festive season. Until Navratra, we saw a lot of customers stay away, and therefore, volume growth was not visible,” NDTV Profit quoted CEO of Titan’s Jewellery Division, Ajoy Chawla, as saying.

Suggesting that the festive season has revived consumer sentiment and has brought back buyers who were waiting for gold prices to cool, he remarked, “But now that people have realised that the price of gold is here to stay and is going up.

Gold prices at Dhanteras 2024

During the same period last year, the price of 24-carat gold was around ₹78,610 per 10 grams. "All those fence-sitters have started coming back. The sentiment is clearly back," Ajoy Chawla asserted.

With record-high gold prices this festive season, the CEO highlighted the prevalent sentiment among consumers, “We’re seeing a run on gold, especially on coins and bars — maybe because of investment or FOMO. People are thinking gold prices will go up further." The current trends indicate that the sky-high prices have not dampened demand but have instead set off the Fear of Missing Out (FOMO).

Over the speculations about jewellery stores running out of gold bars, Ajoy Chawla reacted, “There is a bullion shortage in the country. We have planned for it adequately, but I won’t be surprised if we run out of coins. There is a worry among customers that there may be a shortage of gold.”

Why is Gold demand registering an uptick despite skyrocketing gold prices?

Gold demand in India is led primarily by a surge in physical investment demand for bars and coins, World Gold Council reported citing market reports and anecdotal evidence from trade channels.

The spike in gold prices has failed to deter buyers from their new purchases as it is now being heavily relied as an investment and is reportedly outpacing jewellery purchases. The renewed uptrend in prices have further bolstered expectations of further increases.