Not much gold this Diwali festival
Indian news outlets are reporting that gold sales during this Diwali festival have dropped by 40% – “if city jewellers are to be believed,” as The Times of India puts it.
While this may come as bad news to jewellers, the country’s Finance Minister P Chidambaram certainly won’t be upset. The Reserve Bank of India (RBI) has been fighting hard to curb gold imports, as they’re seen as a major driver behind a large current account deficit (CID).
Last week, Chidambaram said the CID would drop from $88 billion to $60 billion thanks to rising exports and declining gold imports, India Today reported.
Gold sales usually spike during the Diwali festival, which started on Sunday. But high inflation, import restrictions and record-high duties have restricted supply and driven up gold prices for Indians, pushing customers toward diamonds and platinum purchases instead.
“This Diwali is a flop,” one jeweller told CNBC.
But while Indian gold jewellers lament their low sales, merchants in Dubai will do just the opposite. Gulf News reports that gold retailers in Dubai are expecting a 25 to 30% rise in sales this Diwali, owing to the large Indian community in the Emirates.