Customers at Malabar Gold and Diamonds on Camac Street on Dhanteras evening. Picture by Pradip Sanyal

“Sir, you are coming after so many days,” a sales attendant at the Tanishq outlet on Camac Street told a man in his mid-forties who appeared to be a regular customer.

“It is difficult to come to your store regularly,” the man replied, his face wearing a wry smile.

This brief exchange in front of the cash counter at the store captured the new reality of the yellow metal market, which refused to show signs of recovery even during the biggest selling day of the year: Dhanteras, when people buy gold as part of Diwali rituals.

In a departure from the usual long queues outside showrooms, most jewellery stores in Calcutta recorded lower footfall even during the peak evening hours.

“This year, jewellery sales are estimated to be down by about 20 per cent over the same period the previous year,” said Suvro Chandra, head of the east India chapter of the All India Gems and Jewellery Federation.

A dip in jewellery sales on Dhanteras is a rarity, said Bachhraj Bamalwa, a former president of the gems and jewellery federation.

According to him, the volume of yellow metal sales normally grows by 10 to 15 per cent every year on Dhanteras.

From the high price of gold — 24-carat gold touched Rs 31,365 per 10 gram in Calcutta on Friday — to a cautious approach in an uncertain economic environment, industry insiders referred to several factors to explain the dip in sales.

As gold prices started moving northwards — from around Rs 26,000 per 10 gm to more than Rs 30,000 per 10 gm — since the Centre adopted the twin measures of a hike in import duty and curbs on import in June 2013, the yellow metal market has remained depressed.

“The market has been down for almost the past three months. We expect sales to get back to normal by the end of January 2014,” Siddharthaa Sawansukha, CEO, Sawansukha Jewellers.

Though the jewellery industry had expected to make a temporary recovery in the week leading to Diwali, the response from buyers has belied expectations.

“The dip can be partially linked to the price factor… The majority of people who buy gold are informed customers and most of them already bought gold when prices fell to Rs 26,000 mark during April,” Bamalwa said.

Sources in the bullion markets said the drop in sales of gold would be higher — up to 60 per cent — if gold coins and bars were also taken into account.

The sale of gold bars to individuals who procure them from bullion traders as investment has stopped since the Centre’s decision to curb import of the yellow metal because it was contributing to the high current account deficit, resulting in the weakening of the rupee. Jewellers can, however, still buy gold bars.

The sale of gold coins has also plummeted in the run-up to Diwali because some of the prominent sellers — both public sector and private banks — are not selling them this year due to the scarcity of gold.

“I remember receiving messages from banks to buy gold coins during Diwali, but this year I haven’t received any such message,” said Joyeeta Roy, a homemaker.

The fact that the price of gold was almost the same last Dhanteras makes it clear that the overall economic situation in the country has contributed to demand dipping.

Although investors tend to buy gold in an uncertain economic environment, middle-income consumers adopt a cautious approach on bigger spending during difficult times and that element of caution may have come in the way of a recovery in the bullion market this Dhanteras.

With jewellers branding Dhanteras as a season to buy gold, the last few years had seen middle-income people queuing up to buy jewellery on Dhanteras, a northern and western India tradition.

Chandrakanta Roychowdhury of MP Jewellers said many of these customers were missing from stores this year. “Small-time buyers who would buy on Dhanteras are shying away from gold purchase,” he said.