The jewellery market in India is witnessing a change in the buying trend. This is the reason why a wider range of customers will drive demand in the second quarter of 2024. While the first quarter saw rich buyers buying, the second quarter saw an increase in the purchase of low-priced jewellery. Semi-urban and rural markets are also contributing significantly to the overall demand.
These figures have come out in the report of Nuvama. The report suggests that industry-wide volume demand may see an increase of 18 percent in the second half of 2024. Experts attribute this growth to the upcoming festive season, with retailers expanding their store networks to meet the expected increase in customer demand.
A key indicator of the sector’s performance is gold imports. According to the Nuvama report, gold imports in July and August 2024 are expected to be 11 percent higher than the same period last year, with a strong recovery seen in August.
The trend points to rising demand in the jewellery sector, which has also been boosted by continued buying of gold by central banks. This buying activity is driving the growth in both the price and volume of gold in the market. Gold prices have rebounded, currently trading 30 per cent higher than the average level recorded in the second half of 2023. The expected growth in volumes, at 18 per cent, indicates a positive outlook for the jewellery market in the coming months. Domestic gold prices, which had been trading at a discount for five months due to excess stocks and weak demand, also rose following the cut in basic customs duty announced in the Union Budget in July.
Looking ahead, despite a 9 percent annual decline in volumes during the first quarter, the market is expected to rebound. Positive signs of recovery have already begun to appear for the July to August 2024 period, and further growth is expected as India approaches its peak wedding season. The World Gold Council (WGC) has forecast that gold demand will reach 850 tonnes in calendar year 2024, representing a 12 percent increase over last year.
