Unconventional gold sales this Akshaya tritiya

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Jingling coins seem to have overtaken the jewellery fad of Indians during this Akshaya Tritiya. While jewellery sales have been going down, gold coin purchases are on the upswing.

As per World Gold Council (WGC) data on 2011 India gold consumption, jewellery segment witnessed a 14% fall while the purchase of bars and coins saw a 5% growth.

This is despite an overall slowdown of 7% total gold sales last year which touched 933 tonnes.
"The ratio of ornaments to bullion that was 90:10 about five years ago is now 50:50," confirms Tamil Nadu Jewellers Federation (TNJF) secretary Mr Vummudi Jayakumar.

Chennai alone roughly consumes about 150 tonnes of gold annually and of this about 30 tonnes of gold is used up only for gold coins valued at Rs9000 crore. "People opt for gold coins because of the investment value. While jewellery has aesthetic value and goes out of fashion very soon, coins can be redeemed any time," explains Mr Ranjeeth Rathod, MD of city-based MNC Precious metals, who has unveiled his website to buy gold coins.

For an investment product, it should be convenient for customers to dial or click for gold coins, he adds. And this has led the firm to launch new schemes such as dial-a-coin and click a coin this festive season with delivery at customer homes.

Gold accounted for seven percent of household savings in India during 2011, says Mr Ajay Mitra, India MD of WGC. It is this craze that has led the council to tie up with India Post and Reliance Money offering a 6% special discount on the gold coin purchases from post offices. "The offer valid from April 19 June 30 allows consumers to buy Swiss-made pure gold coins in various denominations from a network of 980 post offices in India," he adds.

With rising gold prices, investment in lower denomination coins has become the sole option for middle-class households. With newer buyback options of coins by private players, a facility lacking in banks, the trend is sure to become a hot one.