Across Pune, the bustling activity that once characterised jewellery shops has noticeably diminished, reflecting a significant slowdown in the gold market as price fluctuations and cautious consumer behaviour take hold. The city's gold rush appears to be cooling, with many buyers pulling back in response to soaring and volatile prices that have persisted over recent months.
Market Realities and Jeweller Concerns
Fatehchand Ranka, president of the Maharashtra Rajya Saraf Suvarnakar Federation, has been fielding complaints from fellow jewellers for six months about rising gold and silver prices driving customers away. He describes the situation as a balloon poised to burst, with footfall plummeting by 50 per cent and the once-stable business losing its lustre. "The volatile market is like a gamble," Ranka remarks, highlighting the uncertainty that has gripped the industry.
On a recent Friday, as gold and silver prices crashed in stock markets, Ranka watched carefully, noting that most buyers remain unaware of exact prices or the effects of price corrections unless they visit shops. This lack of awareness contributes to the hesitation seen across Pune's jewellery outlets.
Consumer Adaptation and Wedding Season Adjustments
Despite some stores like Neelkanth Jewellers on Laxmi Road witnessing packed showrooms, numerous small and large outlets report sharp dips in customer numbers compared to previous years. Consumers are adapting in various ways:
- Budget Reallocation: Jyoti Devadkar, shopping for bridal ornaments, explains that for her wedding, they have consciously cut costs on décor, catering, and outfits to prioritise gold jewellery. "Gold is not just jewellery, it is security and tradition. Even if prices are high, we believe it will hold value over time," she says.
- Pragmatic Purchases: Archana Bhosale, also shopping for a family wedding, adopts a more cautious approach: "We are buying lighter jewellery and avoiding impulse purchases. We still see gold as an investment, but we are being careful with how much we spend."
- Lightweight Alternatives: Monika Daga, 35, observes that people will not stop buying gold as it is considered a necessity, especially during wedding seasons, but they increasingly prefer lightweight alternatives.
Many are following suit by planning to buy only half of their overall gold requirement and exploring options like swapping old gold for new designs to manage high prices. Daga herself intends to explore better designs and swap old gold to maximise her budget.
Generational Perspectives and Investment Views
Not everyone is taking the price hike lightly. Shailaja Deshpande, 76, calls it an injustice, stressing that "every Indian girl should be able to afford gold for her wedding; it is her right to buy gold." Similarly, Sharada Mehta, 78, emphasises her family's generational trust in gold, buying it annually regardless of market conditions.
For Pushpanjali Verma, 34, rising prices are a significant concern, particularly with the wedding season and her twin daughters' future weddings in mind. She recalls gold being more affordable when she married a decade ago and now plans to buy gold coins as a better investment, avoiding making charges and other costs associated with jewellery. "It's clear that gold has become a luxury, and it's affecting our purchasing decisions," she notes.
Impact on Small Jewellers and Silver Sales
Atul Kadam, owner of Kadam Jewellers in Pimpri Chinchwad, explains that small jewellers feel the impact of rising gold prices more strongly than bigger brands. "When gold prices remain high, customers hesitate to buy new ornaments and prefer repairing old jewellery. That trend has been visible at our shop in recent weeks," he says.
Kadam adds that a sudden price crash on Friday created uncertainty among customers, directly affecting sales. With the wedding season now over, demand for new ornaments has further reduced. Simultaneously, silver prices have also declined, leading to a drop in silver purchases. "Overall, fluctuating prices and seasonal factors have slowed down business for small jewellery shops like ours," he concludes.
Several shop managers report customers delaying decisions, visiting stores mainly to compare designs and rates, with many choosing to wait. Silver sales have seen a mild increase, particularly for coins, utensils, and gifting items, though traders note it remains a secondary choice compared to gold during weddings.
Trust and Brand Reputation as Key Factors
Jewellers witnessing strong sales attribute their success to trust and brand reputation. Ratnadeep Rajurkar, owner of Rajurkar Jewellers, states: "When prices rise, customers prefer known stores where purity, transparent billing, and resale assurance are guaranteed." He adds that while the average weight per transaction has reduced, wedding-related demand remains firm.
According to Dnyaneshwar Sarwade, showroom manager at Malabar Gold & Diamonds, the market is not sustainable, but investors continue to see gold as a safe haven. "The rising gold rate hasn't affected our sales. Customers have been regular. We have numerous schemes for relaxing the effect of gold price hike," he says, pointing to the trend of buying lightweight jewellery.
As Pune navigates this period of gold market volatility, the shift towards cautious consumption, budget-friendly alternatives, and reliance on trusted brands underscores a broader transformation in consumer behaviour and industry dynamics.
