Gold prices surge: The recent increase in gold prices over the past six weeks has led to a rise in the cost of diamond jewellery in India, resulting in a decrease in demand. In an effort to reduce prices and encourage customers to resume purchasing, many jewellers have started using lower carat gold in their pieces.
According to an ET report, stores are now introducing diamond jewellery in 14-carat gold instead of 18-carat gold, aiming to maintain affordable prices for their aspirational customers. A comparable trend can be observed in the plain gold jewellery category, with many consumers now inquiring about 18-carat jewellery instead of 22-carat pieces.
“Rising prices of the yellow metal have impacted the domestic demand for diamond jewellery,” said Kirit Bhansali, vice-chairman of Gem & Jewellery Export Promotion Council. “The diamond market was showing an upward trajectory till February. But as the price of the yellow metal started moving up, the domestic market went on a slow mode, resulting in demand plummeting by 15% in the last one-and-a-half months compared to January and February.”
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To entice customers, jewellers are now considering offering 14-carat diamond jewellery. Kalyan Jewellers, a publicly traded jewellery company from south India, has begun stocking 14-carat diamond jewellery, despite its lifestyle brand Candere selling 14-carat jewellery separately.
The company is also expanding its 18-carat gold ornament offerings. However, due to the company being in a silent period, the top management declined to comment on this development.
The rising price of gold has led to a shift in consumer behavior, with many individuals now purchasing gold jewellery as a means of investment and to safeguard against inflation and potential further increases in gold prices. MP Ahammed, chairman of Malabar Group, noted, “Due to the gold price rise, consumers are buying gold jewellery for the purpose of investment and to hedge inflation and impact of further rise in gold price. There is a short-term dip in diamond jewellery demand in a few markets in India due to the safe haven status of gold.”
This trend has prompted jewellers to adapt their offerings, with an increasing number opting for 14-carat gold instead of 18-carat gold when crafting diamond-studded jewellery. “In fact, due to the rise in the gold price, there is an emerging trend among the jewellers to opt for 14 carat gold instead of 18 carat gold to craft diamond studded jewellery,” Ahammed added.
The preference for 14-carat gold jewellery is not solely driven by the rising gold prices but also by its durability. Ahammed explained that 14-carat gold is more resilient than its 18-carat counterpart, making it better suited for everyday wear. In response to this trend, Malabar Group is taking steps to cater to the growing demand. “We are strengthening the 14 carat gold diamond studded jewellery inventory at our stores to meet the demand,” Ahammed stated.
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The impact of the rising gold prices on diamond demand has been observed by other industry players as well. Suvankar Sen, managing director & CEO of Senco Gold & Diamonds, a listed jewellery firm, commented, “There has been a drop in diamond demand in March-April since footfalls have been affected due to a surge in the gold price. We have already introduced 14-carat diamond jewellery at our showrooms.”
18-carat gold contains 75% gold, while 14-carat jewellery has a lower gold content of 58%.
Aditya Pethe, a partner at WHP Jewellers in Mumbai, stated, “There is a 17% difference between the two, which reduces the price of the diamond jewellery and is affordable to Indian consumers, who have an aspiration to a diamond piece which is pocket-friendly.” He mentioned that the jewellery industry is currently discussing the introduction of more 14-carat pieces to cater to this demand.
According to Surendra Mehta, the national secretary of India Bullion & Jewellers Association (IBJA), the rising price of gold has led to significant innovation in both gold and diamond jewellery. He emphasized, “In our country, only 14, 18 and 22-carat jewellery can be hallmarked. So there is no harm in buying 14-carat jewellery.”
Plain gold jewellery manufacturers and wholesalers have reported a surge in demand for 18-carat jewellery from jewellers in various states, including Uttar Pradesh, Bihar, Haryana, and Punjab. Saiyam Mehra, the owner of Unique Chains, a prominent gold jewellery manufacturer based in Mumbai, said, “In the last one month we have received huge enquiries for 18-carat jewellery from these states.”
According to an ET report, stores are now introducing diamond jewellery in 14-carat gold instead of 18-carat gold, aiming to maintain affordable prices for their aspirational customers. A comparable trend can be observed in the plain gold jewellery category, with many consumers now inquiring about 18-carat jewellery instead of 22-carat pieces.
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“Rising prices of the yellow metal have impacted the domestic demand for diamond jewellery,” said Kirit Bhansali, vice-chairman of Gem & Jewellery Export Promotion Council. “The diamond market was showing an upward trajectory till February. But as the price of the yellow metal started moving up, the domestic market went on a slow mode, resulting in demand plummeting by 15% in the last one-and-a-half months compared to January and February.”
Also Check | India’s Richest Billionaires 2024: Mukesh Ambani, Gautam Adani bag first, second spots – check list of top wealthiest Indians
To entice customers, jewellers are now considering offering 14-carat diamond jewellery. Kalyan Jewellers, a publicly traded jewellery company from south India, has begun stocking 14-carat diamond jewellery, despite its lifestyle brand Candere selling 14-carat jewellery separately.
The company is also expanding its 18-carat gold ornament offerings. However, due to the company being in a silent period, the top management declined to comment on this development.
The rising price of gold has led to a shift in consumer behavior, with many individuals now purchasing gold jewellery as a means of investment and to safeguard against inflation and potential further increases in gold prices. MP Ahammed, chairman of Malabar Group, noted, “Due to the gold price rise, consumers are buying gold jewellery for the purpose of investment and to hedge inflation and impact of further rise in gold price. There is a short-term dip in diamond jewellery demand in a few markets in India due to the safe haven status of gold.”
Expand
The preference for 14-carat gold jewellery is not solely driven by the rising gold prices but also by its durability. Ahammed explained that 14-carat gold is more resilient than its 18-carat counterpart, making it better suited for everyday wear. In response to this trend, Malabar Group is taking steps to cater to the growing demand. “We are strengthening the 14 carat gold diamond studded jewellery inventory at our stores to meet the demand,” Ahammed stated.
Also Read | Who’s buying and why gold prices are suddenly rising now?
The impact of the rising gold prices on diamond demand has been observed by other industry players as well. Suvankar Sen, managing director & CEO of Senco Gold & Diamonds, a listed jewellery firm, commented, “There has been a drop in diamond demand in March-April since footfalls have been affected due to a surge in the gold price. We have already introduced 14-carat diamond jewellery at our showrooms.”
18-carat gold contains 75% gold, while 14-carat jewellery has a lower gold content of 58%.
Aditya Pethe, a partner at WHP Jewellers in Mumbai, stated, “There is a 17% difference between the two, which reduces the price of the diamond jewellery and is affordable to Indian consumers, who have an aspiration to a diamond piece which is pocket-friendly.” He mentioned that the jewellery industry is currently discussing the introduction of more 14-carat pieces to cater to this demand.
According to Surendra Mehta, the national secretary of India Bullion & Jewellers Association (IBJA), the rising price of gold has led to significant innovation in both gold and diamond jewellery. He emphasized, “In our country, only 14, 18 and 22-carat jewellery can be hallmarked. So there is no harm in buying 14-carat jewellery.”
Plain gold jewellery manufacturers and wholesalers have reported a surge in demand for 18-carat jewellery from jewellers in various states, including Uttar Pradesh, Bihar, Haryana, and Punjab. Saiyam Mehra, the owner of Unique Chains, a prominent gold jewellery manufacturer based in Mumbai, said, “In the last one month we have received huge enquiries for 18-carat jewellery from these states.”
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