A day prior to the Hindu festival of Akshaya Tritiya, gold traders witnessed a healthy demand, and are expecting that the sale would be around 25% more in the week as against the same period last year.
"We are expecting a jump of around 25-28% in gold sale in terms of volume in the festive week as against last year," independent gold analyst Sanjay Agarwal said.
"The main reason for this is the rise in gold prices which has grown by 22% year-on-year in past five years and people expect prices to rise further."
But according to the World Gold Council data, the sale of gold in volume terms has dipped by 7% in year 2011 against 2010.
Diamond jewellery has also grown at a faster rate.
"Due to high gold prices many people are preferring diamonds and the growth of diamond jewellery is about 40% compared to last year in the week," added Aggarwal.
"There has been a steady increase in the demand for gold despite the rise in prices and bullion and jewellery witness equal amount of demand," said Colin Shah, CEO, Kama Schachter, a jewellery brand.
On the Multi Commodity Exchange (MCX) gold with expiry of June was trading at Rs. 28,643 for 10 grams.
According to the industry experts it was expected that buyers would stay away this year from buying gold. This had resulted in many jewellery retailers were offering freebees to customers.