RTRS: India gold trade show suggests pick-up in H2 sales
By Siddesh Mayenkar and Ruchira Singh
MUMBAI (Reuters) - A section of India's top gold merchants are preparing for a sharp pick-up in gold sales this festive season, suggesting demand by the world's top consumer is rebounding despite near-record prices and a bleak monsoon.
Five of seven of the country's big retailers surveyed at the India International Jewellery Show said they see sizeable growth over last year's sales, which had been depressed by the surge in prices as the financial crisis peaked.
The fair, which ends on Monday, is considered an indicator of order-book demand ahead of the August to October festival and wedding season, when gold buying tends to spike.
"The response from the fair is quietly encouraging despite the existing situation," said Suvro Chandra, director, P.C. Chandra Jewellers from Kolkata, at his stall at the trade fair.
"We have received fairly good response from south India. We would be happy if we grow slightly (in 2009) as festivals and marriages are coming up."
While world prices at $953 an ounce on Monday are near their $1,005 peak in February, signs of stability in a range of $900 to $1,000 may have coaxed buyers after imports fell by over 54 percent in the first half of the year to 63.4 tonnes.
But some sources said the demand was not as widespread as in
years past, with most of the big orders from large jewellers.
"The show was very good, but most of the orders came from big buyers not the medium sized or small ones," said Darshanbhai of Manubhai Zaveri Ornaments, a large jeweller and manufacturer from Ahmedabad.
India's crucial June-September monsoon was 28 percent down from normal, raising fears of a drought that could dent farm incomes and curtail demand for consumer goods and gold.
But traders say sales this month have picked up as the Raksha Bandhan festival last week kicked off the busy season that is expected to see good sales until the peak of the festivals in October.
PRICE IS KEY
A large wholesaler, Haresh Acharya of Parker Agrochem Exports from Ahmedabad, said prices were key to future sales.
"If prices fall below $930 per ounce, sales will be good. If they stay between $930 and $970 it may be average," Acharya said.
Acharya also said the larger jewellers were expected to sell better in the festival season and smaller ones would struggle.
For a graphic on India's monthly gold imports, click here
