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Demand for Gold in Rural Market Fell By 30% in India Owing To Unseasonal Rains

Posted on: Nov-2017 | By: 9Dimen Group | Consumer Goods

The demand for gold jewelry has come down to 30% in rural India before Diwali. There is a lot of wealth in the rural areas in the form of gold jewelry. Due to decrease in demand after the untimely rains, note ban and GST being implemented during the harvesting in October, the increase in gold prices is being considered.

These effects will not end soon, owing to which gold makers feel that on October 17, before Diwali, sales on Dhanteras could also be low. Most people in the country buy gold on Akshay Tritiya and Dhanteras. All India Gem and Jewelry Trade Federation (GIF) chairman Nitin Khandelwal said, “Uneven rainfall has affected the sales before Diwali. It will also have an impact on Dhanteras.”

In October, there was an unexpected rain, there was a lot of damage to crops. The demand for jewelry in these states has come down to 50%. However, the demand for gold in totaled Rural India has declined by almost 30%. '

According to the World Gold Council, this year the demand for gold is expected to be 650-750 Ton. In this, the contribution of Rural India is 60%. Dhanteras is of great importance in terms of sales of gold in rural areas. In fact, the farmers buy jewelry from the money received from the sale of the crops after harvesting them. Gold is considered as an asset in rural India. Farmers arrange cash by selling jewelry when the crop is spoiled. People associated with the bullion industry say that the ban on bondage has remained so far and gold has been given with 3% GST. These also had a negative effect on jewelry sales with unseasonable rains.

Saurabh Gadgil, managing director of PNG Jewelers said, “The effect of the ban on bondage has not yet ended. With this, 3% of GST is impaired and gold is expensive. They have a bad effect on the Byers Sentiment. PNG has 12 stores in the rural area of Maharashtra. Gadgil also said, "Farmers do not have enough cash to buy gold.”