Gold jewellery demand weakened by Covid-19 surge, holidays

By

Isabelle Crossley

Published
Jan 3, 2022

With a new wave of Covid-19 cases sweeping the world, gold jewellery purchases were down in India and other Asian nations over the New Year and discounts in India reached the highest level in five months.

States including Haryana and Delhi have re-imposed certain retail restrictions in an attempt to halt the spread of Omicron which has put a dampener on shopping. As curbs on weddings are introduced in states, bridal jewellery shopping has also taken a hit, ET Bureau reported. 
 
This low sentiment has led gold jewellery dealers to offer a discount of up to $5 (Rs 372) an ounce over domestic prices in an attempt to clear inventory. This week’s discount, inclusive of both 10.75% import and 3% sales levies, is more than double than the $2 discounts offered the week before. 

“For the past few days demand was very weak,” Kolkata-based gold wholesaler Harshad Ajmera told Reuters. “Jewellers were not making big purchases as retail buying has dried up. Many jewellers are not replenishing inventory. They are afraid of a new wave of coronavirus.”
 
Smaller gold jewellery businesses are bracing themselves for a return to tougher retail restrictions after also having to accommodate the shift to mandatory gold hallmarking in 2021. The spread of Omicron and its effects on healthcare over the coming month will give an indication of how 2022’s retail landscape will look.