Despite high gold prices, jewellers report strong Akshaya Tritiya footfalls
This story was originally published at 16:34 IST on 30 April 2025
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By Sandeep Sinha
MUMBAI – Gold is poised to deliver another 10-15% return by Akshaya Tritiya next year, after a third straight year of double-digit gains. The festival, celebrated Wednesday, is associated with wealth, prosperity, and happiness and is considered an auspicious day for purchasing gold, scheduling weddings, and starting new ventures.
In value terms, gold has gained the most since Akshaya Tritiya last year, rising by INR 22,200 per 10 grams. In 2024, the festival fell on May 10. At the time of writing, the June gold futures contract on the Multi Commodity Exchange of India was at INR 93,755 per 10 grams. The precious metal has delivered a positive performance for the sixth successive year at Akshaya Tritiya with the highest return of 47% in 2020 and the lowest of 3% in 2022. The precious metal has delivered the second-highest return of 30.5% since last year because of safe-haven demand and the heightened geopolitical uncertainty.
"Retailers report solid footfalls, particularly in southern India, where the festival is culturally important," said Prithviraj Kothari, managing director at RiddiSiddhi Bullions Ltd. "Despite (retail) gold prices hovering around INR 100,000 for 10 grams, consumer sentiment remains strong."
He said high prices have changed consumer behaviour, with buyers opting for lighter jewellery and coins. "While gold volumes may decline, the overall value of gold sales is likely to remain constant or increase, with high pricing and careful promotional activity accounting for the additional value," Kothari said.
Several factors support the current record-breaking rally in gold prices, such as policy uncertainty relating to US tariffs, de-dollarisation, central banks' buying, and strong appetite among high-net-worth individuals. "Gold has long been regarded as a safe-haven investment during periods of economic uncertainty and works as an excellent hedge against rising inflation," said Parul Maheshwari, a Mumbai-based certified financial planner. "Globally there continues to be high uncertainty on geopolitical issues, and the tariff wars are not yet over. Gold is a diversifier in portfolios and given the current scenario, investors should use dips to buy and should allocate up to 10% of their portfolio to gold."
Maheshwari suggested that buying gold through mutual funds is currently the best option for investors as these schemes are well-regulated. Investors save on storage and making costs, and there is ease of transaction as "they can buy gold for as little as INR 100".
"One should add gold on every dip as the long-term trend remains positive," said Manoj Jain, director at Prithvi Finmart. He expects gold to reach INR 110,000 per 10 grams by next year, a further rise of around 15%.
Barring a few intermittent corrections, the rise in precious metals has been consistent and steady. Gold prices have grown at a compounded annual growth rate of 10% over the past 15 years.
"Demand and supply factors historically have not directly made a big impact on gold prices, especially in a scenario where there are more overpowering uncertainties in the market," Manav Modi, senior bullion analyst at Motilal Oswal Financial Services, said. Gold prices have posted a sharp rally over the last couple of months, and so some cooling off cannot be ruled out, he added.
"We continue to maintain a positive stance for precious metals and recommend buying on dips, with a target of INR 106,000 per 10 grams for gold. Investors can start to accumulate gold near INR 90,000-INR 91,000 levels," Modi said. End
US$1 = INR 84.48
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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