They plan to introduce more 14-karat, 18-karat and diamond studded jewelry to stimulate demand in the new year. Generally, jewelry in India is made from 22 karat gold.
Gold had peaked at Rs 56,000 for 10g in August and a section of analysts estimate that the yellow metal could even rise to Rs 65,000 if the mass distribution of the Covid-19 vaccine was not carried out to well and geopolitical tensions between the United States. and China has stepped up.
Malabar Gold & Diamonds President Ahammed MP said: “In fact, the product strategy for gold jewelry is gradually shifting towards a lightweight format due to rising prices and changing consumer sensitivities. . So the demand for gold will take a new shape in the future.
Economic and social uncertainties have bolstered gold’s safe haven status and that scenario will remain unchanged in 2021 and beyond, he said.
“The underlying theme of investing will emerge stronger in the coming days and this trend will have a positive impact on jewelry retail as well. That said, the expected rise in prices will have a temporary impact on the demand for jewelry. Once people accept the new normal prices, sales will pick up again, ”he told ET.
Gold prices have risen well since early 2020 with a gain of over 40% at one point. With an intermediate correction recently, the excess foam has been removed and gold is once again preparing for a next round of bullishness, analysts said.
Much will also depend on the success of the Covid-19 vaccination campaign around the world.
“We are always faced with the issue of mass production and distribution around the world; there is also mistrust between politicians and people, which is not a good sign when it comes to a vaccine. The economic figures certainly show a good image and the vaccine raises hopes for the near future, ”said Navneet Damani, vice president (commodities research) at Motilal Oswal Financial Services. Positive indicators, he said, would be “good for bullion in the long run.”
“We continue to maintain our optimistic view for the long term perspective. On the Comex, from 2021, the price is expected to extend its uptrend to test a new record high of $ 2,400 to $ 2,500 per troy ounce. While, on the home front, price is likely to extend its gains by an additional 25% and test Rs 65,000-68,000 per 10g level, ”Damani added.
The ongoing pandemic and economic uncertainty had had a huge impact on the gold trade in 2020. But the trade is cautious this year and is working on products that may attract buyers.
“Now that prices are going up, we will need to focus on 18k, 14k and diamond jewelry to keep the customer base intact,” said Suvankar Sen, Managing Director of Senco Gold & Diamond.