The popular practice of purchasing gold or other valuable items on the auspicious occasion of Dhanteras has undergone a shift and soaring prices have dampened consumer mood
Representative Image. Pic/iStock
After muted celebrations for the last two years in view of the Covid-19 pandemic, this year Diwali is expected to be extra special. Elaborate decorations of homes, offices and public spaces with traditional clay lamps, paper lanterns, and fairy lights, the bursting of firecrackers, the exchange of gifts with loved ones, purchase of gold and other valuable items, and the preparation of delicacies are essential elements of celebrations.
The popular practice of purchasing gold or other valuable items on the auspicious occasion of Dhanteras has also undergone a shift and soaring prices have dampened consumer mood.
For Girgaon resident Pooja Vanarse, rising prices are casting a long shadow over the festival of lights. Pooja, while talking to Mid-Day, shared how the price rise has affected festival celebrations over the years.
“Yes, the price rise has affected the festival celebrations over the years. From fuel and cooking gas prices to prices of essential commodities such as vegetables are going up without any regulation. It is making daily life more expensive. With salary cuts, there is not much enthusiasm among people for the festivals as the households are finding it difficult to budget resources. Even for gold, it's the same. Not all can afford to buy gold at such a high price,” she said.
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Dhanteras and Diwali are around the corner, Pooja wishes to buy some gold jewellery from her savings as it is considered auspicious. “Yes, this year I am planning to buy a gold bracelet for myself. I think it's a good investment as gold prices are always rising,” she said. “Even last year, I bought gold earrings from the money I had saved,” Pooja added.
Explaining why she buys gold or gold jewellery during Diwali, she explained, “We buy gold during Diwali and Dussehra as both these festivals are considered auspicious according to the Hindu religion.”
But not everyone is buying gold. Chandresh Kumar Singh, an interior designer, has stopped buying gold since the pandemic. “I used to purchase gold on Dhanteras. We had a tradition of buying gold or silver during Diwali. But for the last two years, we stopped buying gold as Covid impacted our financial situation.”
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Singh, a Bhayandar resident, might not be buying gold but plans to celebrate Diwali with much fanfare. “This is the biggest festival of the year, so preparations are in full swing. Planning is done and execution is on,” he added.
However, jewellers had a different take on the gold-buying pattern over the years. Aditya Pethe, Director of Waman Hari Pethe Jewellers, said, “Buying gold has not decreased over the years. The rates of gold have increased, so the volume of purchase may have changed. But the value of the purchase hasn’t reduced as such. During the pandemic, sales were less as the stores were shut. As gold performed well during the pandemic, it has reinstated the faith of the consumer in the category. Even younger consumers are looking at gold with a fresh perspective and renewed interest.”
Pethe explained that gold also helped many families stay afloat during the pandemic. “During the pandemic, gold was the only asset that performed well and proved to be most useful. Many people sold small quantities of gold and survived the lockdown. Consumers were reminded that gold is an actual global currency and in times of crisis can be counted on. People are now restocking gold and ensuring that the metal is a part of their investment portfolio. The newer generation is consuming the gold in the form of daily wear products, women prefer having seven light necklaces for seven days, compared to having one big necklace that they wear occasionally and is otherwise hoarded in lockers.”
Explaining how the pandemic affected the business, the director of Waman Hari Pethe Jewellers shared, “As a retail business, we were impacted quite a lot. The cash flow had paused as stores were shut but expenses remain as it is which include salaries, infrastructural costs, interests, etc. The support given to the industry was negligible so the businesses had to bear the impact fully. A lot of small businesses had to shut as well.”
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Pethe further said that this year started on a good note and they have seen good footfall and sales from the beginning. “With the festive season nearing we are seeing a gradual growth in footfall every day. Unlike last year, when there was a post-lockdown revenge buying trend that was temporary, this gradual growth in footfall seems more real and sustainable. People were comparing YOY growth with lockdown year’s figures which was a low base to compare with. This year we can safely speculate that there will be at least a 10-15 per cent growth in sales compared to pre-lockdown year,” he added.
Echoing similar sentiments, Shrey Mehta, Director of Pooja Diamonds, said, “Gold buying has not decreased. Since the pandemic, we have seen an increase in the purchase of gold as people see gold as a luxury product as well as an investment item.”
Speaking about change after two years of lockdown, Mehta added, “Gold has reclaimed its space in Indian weddings and portfolios of investors. Pre-pandemic more budget was allocated towards functions and decor of a wedding. But recently the number of functions has reduced and gold investment for bridal jewellery has increased again.”
Sharing how Covid-19 affected business, the Director of Pooja Diamonds said, “There was an abrupt pause due to lockdowns and all businesses were impacted, things are quite normal now.”
After two years of muted festive celebrations, Mehta said this year looks positive about sales as festivals. “We are expecting a 15 per cent increase on our year-on-year sales target,” he signed off.
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