Demand for gems and jewelry during Dhanteras and Diwali is expected to remain strong this year, with Diwali sales projected to exceed $3.57 billion (Rs. 30,000 crore) in the domestic market, according to industry experts. Rising prices of precious metals are leading consumers to view gold as a dependable asset, while silver is gaining popularity due to its lower cost and significant industrial applications. Some analysts predict a year-on-year sales growth of 10-15%, although overall volume may decrease.
Silver has emerged as the top performer in the market, boasting returns of over 40%, while gold has seen returns of 23%, both outpacing the returns of stock market benchmarks. The Eastern Regional Chairman of the Gems and Jewellery Export Promotion Council (GJEPC) noted that gold continues to attract interest amid global uncertainties, while silver is appealing as a more affordable alternative. This year has also witnessed a notable shift from diamonds to gold, largely due to the increasing popularity of lab-grown diamonds, which has negatively impacted the demand for natural diamonds.
Industry leaders, including Ashok Bengani, President of the Ankurhati Gems and Jewellery Manufacturers Welfare Association, highlighted the necessity for the Finance Ministry to reduce gold import duties from 15% to 9% to promote market sustainability. Despite the rising prices, optimism remains high, with projected sales growth of 10-20%. Motilal Oswal Financial Services Ltd (MOFSL) anticipates that silver prices could eventually surpass gold, forecasting targets of $1,487.62 (Rs. 1,25,000) for silver and $963.98 (Rs. 81,000) and $1,023.48 (Rs. 86,000) for gold in the medium and long term, respectively, influenced by geopolitical tensions and changing market conditions.
