Fluctuation in gold prices and tight liquidity in the markets has hit jewellery sales ahead of the festive season in Indore too.
With sales down as compared to last year, jewellers are planning to 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. We are planning to come out with some discount schemes in near future," Indore Sona Chandi Vyapari Sangh president Hukumchand Soni said.
Meanwhile, customers are eyeing light weight and 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 early August, gold prices fell to a five-year low of Rs 24,500 per gram. With the turmoil in the global market and strengthening dollar, the prices have risen by about 7% since then to Rs26,000 per 10 gram." Consumers were earlier expecting the prices to come down further, but that did not happen. Now, they seem to be waiting for the festive season," Soni said.
Erratic rainfall in the Malwa region this year is also worrying the jewellers. "It's a bit early to predict crop output, but a below average harvest will affect the rural demand in October ahead of the marriage season," jeweller Rajesh Jain said. "In addition, money from realty sales has also dried up," he said.
Jewellers are planning to introduce 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.
With festive season around the corner, jewellers are keeping their fingers crossed hoping for stable gold prices.