Sonam Kapoor sports a gold neckpiece

The World Gold Council is going all out to promote gold as a Diwali must-buy. Council MD (India and Middle East) Ajay Mitra and marketing director (India) Prachi Tiwari tell t2 why the yellow metal is a pop pick for many...

Gold prices shot up to their highest ever in September and when everyone expected them to climb further or at least stay put, they started dropping, leading to panic among jewellers. What is the reason behind this fluctuation?

The financial instability in Europe led to the highs and lows in the price of gold, as investors felt the yellow metal was the only thing they could safely invest in. Generally gold price has a 5.5 per cent volatility, but in October that became 20-21 per cent.

What is the status now?

We are now heading towards a stable gold price. European countries have come together to tackle the financial crisis and that has helped stabilise the price of gold.

Did the price fluctuations have an impact on the gold jewellery market in India?

Usually the July to September quarter is a lean period in the jewellery market. The demand starts picking up in mid-September, especially in west and east India, because of Ganesh Chaturthi and Durga Puja. This year we have seen sporadic increase in sales, only as much as was necessary for people to meet their festive demands. However, with the gold price stabilising, sales picked up in October and we expect the demand to be good during Diwali-Dhanteras and the wedding season.

Have rising prices altered the consumption pattern of gold? Are people buying less, or looking for lightweight options when they must buy?

The equation between price and value has changed, in favour of value. People now realise that gold is a better investment than say, a fixed deposit. So they don’t mind the price.

Sales in India account for how much of the total gold sales globally?

India constitutes about 32 per cent of the total gold consumption across the world. We are the biggest consumer of gold jewellery and gold bars and coins.

But in India, isn’t gold more about ornamentation than investment?

Indians have a unique relationship with gold. From an early age we look upon this metal as an adornment. It’s an important part of every girl’s trousseau. But it’s also looked upon as investment.

What is the sales ratio of jewellery vs gold bars (for investment) in India and in Calcutta?

Nationally, about 75 per cent is jewellery and 25 per cent gold bars and coins. The figure is the same for the Calcutta market.

Is Calcutta a bigger consumer or manufacturer of gold jewellery?

The south is the biggest market for gold jewellery in India. The east constitutes about 22 per cent of total gold sales in the country. The council doesn’t have export figures, but Calcutta does supply finished gold products to the rest of the country, especially gold filigree work. But it seems the market in Calcutta is bigger than the production work happening here.

Which are the best buying periods in Calcutta and what kind of jewellery sells more here?

The wedding season accounts for about 50 per cent of sales across the country. That apart, Durga Puja and Dhanteras also see good business. Plain gold and filigree work are most in demand here.

Why do you buy gold during the festive season? tell t2@abp.in