Chennai: Despite a 25 per cent rise in gold prices, ICRA expects jewelery sales to grow by only 14-18 per cent in the coming financial year 2072/73, indicating lower sales in terms of volume.
After recording a price growth of 18 per cent in FY24, gold jewelery sales are expected to grow by 14-18 per cent in FY25, ICRA found.
However, so far in the current financial year, the price of gold has increased by 25 percent compared to the average price of the financial year 2024. Therefore, it is expected that the sales of gold jewelery will decrease in terms of volume.
“We expect a mid-single-digit decline in volume sales, somewhere around 4-7 per cent. Customers generally come with budgets and prices remain high, which will impact volumes,” said Sreekumar Krishnamurthy, senior VP and co-group head, corporate ratings, ICRA. .
However, from January to November, gold imports increased by 10 percent to 755 tons, according to Metal Focus. This high import volume seems to favor gold coin and bar sales.
“We expect double-digit volume growth in bars and coins this year as demand for gold investments was high due to bullish sentiment in the market. The price correction would have been used by investors as an opportunity to acquire more gold,” Krishnamurthy said.
According to the World Gold Council, the investment demand for gold increased by 41 percent to 76.7 tons in the September quarter. Bars and coins are also in huge demand during the festive season quarter.