Gold Jewellery Purchase Poised To Surge: ICRA

New Delhi: The domestic gold jewellery consumption (in value terms) is expected to continue its momentum in the current financial year with an estimated growth of 14-18 per cent year-on-year, according to an ICRA report released on Tuesday. This follows the sharp growth of 18 per cent in 2023-24, which was primarily driven by realisa-tions even as volume growth was subdued.

A sharp 900 basis points (bps) cut in import duty in the Union Budget in July 2024 and conse-quent correction in gold prices for a brief period led to some pre-buying of jewellery as well as bars and coins during Q2 FY2025, which is generally a seasonally weak quarter, the report said. “While gold prices were volatile, improving consumer sentiments and festive-led demand aided consumption growth in recent months. This, coupled with a higher number of auspicious and wedding days, and favourable monsoons aiding better rural output, is likely to help jewellery demand growth in H2 FY2025,” the report opined.

Revenue growth for organised jewellery in FY2024 had been supported by realisations with gold prices rising by 14 per cent year-on-year. The same trend is expected to continue this fiscal as well. So far in the current fiscal, the average gold price has risen by a sharp 25 per cent vis-à-vis FY2024 average price, despite occasional corrections – first, after the cut in customs duty in late July 2024 and then in November 2024, following the US elections and currency movements. The continuing uptick in the gold prices for the last seven quarters has been stimulated by the evolv-ing global economic and geopolitical scenario, and rising investment demand for gold, the report observed.