Will India’s Gold Rush Return?

Indian jewellers are banking on the first normal festival season after two years to drive retail demand for the yellow metal.

Optimism comes amid multiple headwinds of higher import duty, inflation and the depreciation of the Indian rupee.

"The hike in custom duty has impacted us and there is no growth in terms of business," said Raj Kothari, managing director at Master Chain, a manufacturer and exporter of gold jewellery. "Although the demand is there, it is subdued."

Gold jewellery demand rose 49% year-on-year in the quarter ended June over a year earlier, according to the World Gold Council.

Jewellers expect lower prices and the auspicious period for buying in the run-up to Diwali to offset these headwinds.

"The gold prices, which were earlier Rs 53,000, have come down to Rs 50,000. The demand will also increase as the gold prices have reduced by Rs 3 lakh per kilo," Madan Kothari, chairperson, Master Chain said.

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