Jewellers in Indore are feeling the pinch of crop damage due to erratic weather as rural demand has failed to pick up this festive season.
Fluctuation in gold prices and tight liquidity in the markets has also hit the sales of jewellery. With sales down as compared to last year, jewellers have come out with aggressive discount offers to woo buyers.
“The market is subdued as people are reluctant to shell out money to buy jewellery due to tight liquidity condition,” Indore Sona Chandi Vyapari Sangh president Hukumchand Soni said.
Meanwhile, some customers are eyeing light weight and also 18-carat ornaments to cope with the volatility in gold prices. People, who buy gold as an investment option, say they would rather wait as the prices continue to fluctuate.
In August, 24-carat gold prices fell to a five-year low of Rs 24,500 per gram. With the turmoil in the global market and on back of strengthening dollar, the prices have risen since then to Rs 27,000 per 10 gram levels.
Jewellers say that consumers were earlier expecting the prices to come down further but that did not happen.
Erratic rains in Malwa region this year are also worrying the jewellers.
“A below average crop output has had its impact on the rural demand ahead of the marriage season,” jeweller Rajesh Jain said. “In addition, money from realty sales has also dried up,” he said.
Jewellers are resorting to introducing different kinds of products to keep the consumer interest alive. Light weight jewellery set in 18-carat gold and jewellery set in low-quality diamonds are some options that jewellers are looking at in recent weeks.
Consumers are also stepping up recycling of old gold jewellery. “Today about 40% of business comes from recycling jewellery while earlier it was around 25-30%,” Jain said.