Indians and ornaments can be used simultaneously showing the obsession Indian have over jewelleries, specifically gold. Considered a symbol of purity and sanity, gold is purchased on occasions as a good sign for the wealth of the family. But, the pandemic and virus situation has brought the purchase of the gold plunging to the lowest on record.
Lockdowns in India since the end of March shuttered businesses and left millions jobless. Factories have reopened even as the epidemic in the country is now growing at the fastest pace in the world.
According to the World Gold Council, Gold purchases by Indians this year are forecast to tumble to a record low as the coronavirus pandemic hurts the economy and prices surge to all-time highs.
Consumption fell 56% from a year earlier to 165.6 tons in the first half of 2020 and the drop is unlikely to be made up during the rest of the year, P.R. Somasundaram, managing director for India, said in an interview. “Going by what we are seeing now, lockdowns are still continuing in many parts of the country and it will be a very, very challenging year. It must be one of the lowest perhaps we have ever seen.”
However, factories have reopened gradually according to the unlock guidelines laid by the government but the economy has slowed down and is in a period of recession. Gold prices have peaked up resulting lower consumption.“For gold demand to survive, the economy has to do well,” Somasundaram said. “There is also a lot of anxiety among people regarding incomes and a lot of people from the unorganized sector are not doing much business. Whatever savings people have, they will put it into the businesses or pledge gold to raise money. They will not put that into buying gold.”
He adds, “However, demand could jump by 350 tons in a single quarter if life as we know it comes back. A sense of optimism is developing among jewellers that by the festival of Diwali, in November this year, virus-related disruptions may matter less as people learn to live with it, spurring consumer confidence and jewellery demand.”
With the coming festivals of Diwali, Rakshabandhan and many more, people who were planning to surprise their loved ones with gold ornaments will find it a bit difficult this time and may need to alter their plans.
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