India set for lowest gold sales in 25 years

India set for lowest gold sales in 25 years

FILE PHOTO: Gold anodes are pictured at Swiss refinery Metalor in Marin near Neuchatel, Switzerland July 5, 2019. Picture taken July 5, 2019. REUTERS

India’s sales of gold jewelry to bars are set to plunge to the lowest in a quarter of a century as a lockdown to combat the rapidly spreading coronavirus brings the industry to a standstill.

Demand in the world’s second-biggest gold consumer has already tumbled, slammed by record-high domestic prices and an economy headed for the slowest pace of growth in 11 years. That pain is set to deepen as the virus spooks buyers and jewelry stores shutter their stores after Prime Minister Narendra Modi and state leaders imposed an almost-complete lockdown across much of the country.

Total purchases are estimated to plummet 30% in 2020 from the 690 tons last year, N. Anantha Padmanaban, chairman of the All India Gem and Jewellery Domestic Council, said in a phone interview from Chennai. That would make it the smallest annual purchase since the 477 tons bought in 1995, according to data compiled by Bloomberg based on World Gold Council reports.

“2019 itself was a very bad year after July and this year we have already lost this month,” as a majority of stores across of the country will be closed for most of this week at least until further advisories from the government, he said, adding that 11 of his own stores in the southern Indian state of Tamil Nadu will be shut till March 26. “April is going to be the same, with May-June also expected to be weak,” for demand, he said.

Concerns about the virus have seen the local gem and jewelry sector come to a halt with virtually no footfall in stores and many jewelers shutting shops located in malls and shopping complexes. Titan Co., the nation’s biggest jeweler by market value, has shut stores and manufacturing units until March 29, and will review the situation at the end of the period, it said.

Shares of Titan fell as much as 10% in Mumbai before reversing to a 1.1% increase, in line with gains in the benchmark index.