Gold has always been of prime importance in India and has been a preferred investment option, considered to be safe. Often seen a mark of wealth, households across the country have always invested in the yellow metal. In line with the same, Akshaya Tritiya (which falls on Sunday) has is one of the busiest days as it is considered an auspicious day for Hindus to go buy gold.
This year, however, many are left wondering how they can buy or invest in the same, at a time when the economy is slumping, and gold prices are continuing to surge. Due to volatile markets, gold prices were as high as Rs 47,000 per 10 grams last week, and increased by Rs 1,700 in three days.
Shekhar Bhandari, the President of Global Transaction Banking at Kotak Mahindra Bank said that Akshaya Tritiya this year looks subdued.
“The inventory on hand for the jewellers as well as the gold jewellery held by households in India have seen significant appreciation in value. Prices in April last year around Rs 3200/3300 a gram and currently around Rs 4600 levels have resulted in an increase in the wealth by 43% year on year for those who have invested, purchased or diversified in gold. Domestic jewellery demand has seen a significant drop given the rise in prices throughout the last financial year. The biggest impact to hit demand (incl Exports) has been the Covid-19 crisis,” he said.
However, he says that the price outlook remains positive as gold prices are expected to rise significantly. “We can expect gold prices to continue the rally, to settle above Rs 5,000 a gram by the end of this financial year, primarily driven by the Covid-19 crisis and its significant impact on the global economy.”
While neighbourhood jewellers continue to be shut due to the lockdown, the precious yellow metal is moving online. Larger jewellers are pushing for the online sale of gold online and are attempting to woo customers with lower prices.
Customers can purchase gold from 2 grams upwards, and the Gold Ownership Certificate will be sent to them on the day of Akshaya Tritiya via email, WhatsApp or other customer recommended platforms.
Kalyan Jewellers is offering gold ownership certificates to those willing to purchase above 2 grams and can redeem it any time before the end of the calendar year. “As the rate protection offer is also included in this certificate, customers get the additional benefit of protection against price fluctuations. If on the day of redemption, the price of gold is lower, then that rate will apply,” Kalyan Jewellers said.
Tanishq has said that customers can place orders on the website and pick up the jewellery once the lockdown ends. However, to aid customers online, they have also set up video calling and live assisted chat to solve customer queries. Along with this, there is also a discount on making charges of gold and a rate protection scheme till November.
ORRA, on the other hand, is allowing customers to block purchases on the website till Sunday, at the current price, and pick it up post lockdown. “If the rate goes up on the delivery date, the customer still gets the jewellery at the price they had blocked; if the rate goes down, the customers can avail additional jewellery for the difference amount,” ORRA said. It is also trying to woo customers by offering a flat 50% off on making charges of 22KT gold jewellery and 24KT gold bars and gold coins.
Not just jewellers, fintech companies such as Paytm and PhonePe too, allow customers to buy gold online and are looking to cash in on the opportunity this Akshaya Tritiya.
Flipkart owned payment system PhonePe is also allowing customers to purchase gold on the platform through SafeGold or MMTC-PAMP, India’s accredited Gold refineries to create a gold marketplace for its customers
On PhonePe, customers can buy certified 24 Karat (K) gold at live prices. It is also offering up to Rs 100 cashback on gold purchases. Gold purchased by customers on the app will be stored in a free bank-grade insured locker facility.
Paytm, on the other hand, is offering gold for as little as one rupee on its app. It has partnered with MMTC and has offers allowing customers to buy gold with no minimum quantity restrictions.
However, even as jewellers are trying to woo customers online, this may not necessarily work. Madhavi Mehta, senior analyst at Kotak Securities told Bloomberg, “While online platforms are developing, major gold buying in India is concentrated in the rural sector and there may not be much appetite there for these products.”
All India Gems and Jewellery Domestic Council Chairman Anantha Padmanaban told PTI, “In April, the loss in revenue will be 15% of the total annual turnover due to Akshaya Tritiya falling in the month when the country is under lockdown to prevent the spread of COVID-19.”