(Bloomberg) -- Gold jewelers made brisk sales in India on the Diwali weekend with consumers' interest riding on a recent drop in prices.
Jewelers feared hesitancy among buyers during the festival season after bullion prices jumped due to the Israel-Hamas war in early October. However, as wider escalation of the conflict has become less likely in November, gold has retreated. That will likely boost sales for the October-December period that Indians consider an auspicious time to wear gold, and may help support global prices by limiting losses.
The world's second-largest gold consumer saw an 8% growth in demand on Dhanteras, the first day of the Diwali period, according to Surendra Mehta, national secretary at the India Bullion and Jewellers Association Ltd. Coins made for about a third of the sales and the rest was jewelry, he said. Ahead of the Diwali festival, the Confederation of All India Traders expected sales of more than 500 billion rupees ($6 billion), especially in gold, clothes and home ware.Â
READ: Indians Splurge Big on Festive Season Sales, Buoying Economy
The World Gold Council expects Indian sales in the second half of 2023 to partially offset weak consumption in the January to June period. Overall demand is expected to be between 700 tons and 750 tons in 2023, down from 774 tons the prior year, the body estimates.Â
Consumer sentiment saw a significant upswing over the past three weeks of this festive season, according to Ajoy Chawla, chief executive officer of Titan Co.'s jewelry division, part of Tata Group. The company is optimistic sales will achieve new highs during this period helped by the recent cooling in prices, he said.
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