High Gold Prices Dampen Akshaya Tritiya Festivities

Akshaya Tritiya sees weakened gold demand due to high prices, despite being an auspicious day for purchases. International gold prices have surged over 40% in the past year. Analysts cite trade uncertainties and rising costs as reasons for consumer restraint, leading to a preference for gold ETFs and digital coins.

In the backdrop of Akshaya Tritiya, a significant occasion for gold purchases in the Hindu calendar, demand for the metal remained subdued, largely attributed to soaring prices. Analysts and jewelers have noted a reluctance among consumers to invest in gold, with international prices climbing more than 20% in 2025 alone, and 40% over the last year.

Gold prices are at historic peaks, driven by its safe-haven status amid global trade tensions. The ongoing uncertainty around former President Trump's tariff policies has further influenced this trend, lifting the prices consistently. According to the World Gold Council, gold demand in India dropped by 15% to 118.1 tonnes in the first quarter of 2025 compared to the same period in the previous year.

Commodity research analyst Manoj Kumar Jain from Prithvi Finmart noted a 25% decline in demand this Akshaya Tritiya, citing high prices as a deterrent for buyers. Concurrently, Hareesh V from Geojit Investments Ltd highlighted a shift towards gold ETFs and digital coins, given the price hikes. Additionally, physical gold sales have slumped, with market prices at Rs 94,380 per 10 grams on MCX and Rs 95,000-96,000 in stores.

Advisory firm Kedia Advisory's Ajay Kedia advises limited gold purchases, predicting moderated returns in alignment with inflation rates. Meanwhile, Kama Jewelry's Colin Shah sees potential in consumer purchases amid price peaks, while the Confederation of All India Traders reported approximately Rs 12,000 crore in sales during the festival.

(With inputs from agencies.)