NEW DELHI/MUMBAI: Reflecting the economic slowdown, the sale of gold and silver prior to Diwali Dhanteras fell by up to 40 percent because high prices and lower consumer spending affected demand.

Dhanteras, considered the most auspicious day in the Hindu calendar to buy items ranging from precious metals to utensils, was a silent matter in most markets across the country, with merchants complaining of a lower footprint and a reduction in spending of consumers.

On Friday, gold prices It increased from Rs 220 to Rs 39,240 per 10 grams in the national capital, up 20 percent compared to the 2018 Dhanteras when rates were at Rs 32,690 per 10 grams.

According to the Confederation of All Merchants of India (CAIT), it was estimated that up to 6,000 kg of gold worth Rs 2,500 million were sold until Dhanteras day night, compared to 17,000 kg of gold worth 5,500 million of rupees on this auspicious day of 2018.

According to one estimate, there was a 35 to 40 percent decrease in business, which is a matter of great concern to traders, said the president of the Gold and Jewelry Committee of CAIT, Pankaj Arora, in a statement.

Sales fell because the prices of both gold and silver have risen sharply compared to recent Dhanteras, which has weakened demand, he said, adding that it was perhaps the most disappointed Dhanteras for traders in the last 10 years.

The president of the National Jewelry Council, Anantha Padmanaban, president of All India Gem and Jewelery Domestic Council, said: In terms of volume, we expect sales to be 20 percent less than last year. In terms of value, it will be the same as last year because of higher prices.

Most consumers are buying lower value tokens and are waiting for the price correction for the purchase of wedding jewelry, he said.

The western region of the country is doing good business compared to other regions of the country, since Dhanteras is an important festival there, he added.

The president of the Karol Bagh Jewelry Association of Delhi, Vijay Khanna, said that most buyers are restricting their purchase to tokens, especially for investment purposes.

We see flat sales this Dhanteras but we hope to recover during the wedding season in the coming days, he added.

Senco Gold and Diamonds executive director Suvankar Sen said the sales are expected to remain “muted” this season owing to the surge in the gold prices and current economic slowdown.

“As the purchasing power has come down, we can see de-growth in the range of 10-15 per cent in sales quantity. However, in terms of sales valuation, it may remain same as that of last year as the gold prices are high,” he said.

Kumar Jain, from UT Zaveri, in the Zaveri Bazaar in Mumbai, said: The momentum has accelerated and there is a rush for jewelry reserves for weddings. Small items are working extremely well.

The managing director of the World Gold Council India, Somasundaram PR, said: The sharp increase in the price of gold and the deep discount in the bullion market impacted trade and consumer outlook in the third quarter, however, Dhanteras seems to have Changed this as expected.

The managing director of the MMTC-PAMP India gold refinery, Rajesh Khosla, said that overall the sentiment was clearly moderated due to high gold prices.

The gold rates of Rs 39,000 per 10 grams were too expensive for people. There was a change to silver coins, he said.

MMTC-PAMP said its sales of silver coins increased by 15 percent over the last Dhanteras, while gold coin sales remained slow.

However, the president and managing director of organized player Kalyan Jewelers, T S Kalyanaraman, said: We are witnessing a positive momentum in our showrooms. It is too early to comment on a general trend or growth.

We are predicting more traction during the afternoon hours and even early tomorrow, because this year the gold purchase Muhurat is divided into two days, he added.

Dr. Hazoorilal Legacy, Rohan Narang, said: In general, we witnessed a positive increase in sales compared to the usual days. We are optimistic and we hope that the wedding season keeps the shine of the jewelry industry.

The managing director and founder of the city-based Gem Selections, Pankaj Khanna said there was a big increase in the sale of silver compared to gold.

We sold more than 130 kg of silver during Dhanteras compared to 23 Kg last year due to the increase in our e-commerce, retail footprint and brand, he added.

The director of Augmont bullion dealer Sachin Kothari said that gold sales on its digital platform it doubled, while it remained 15 percent lower in the physical market.

“With gold prices being at an all-time high, digital gold purchase medium provides buyers the liberty of buying gold as low as Re 1 and this flexibility is gaining ground,” he added.

The director of the Kundan Group, Vidit Garg, said: We have almost used up all the coins in the denomination and demand remains strong.