Gold Jewellery demand to slow down due to rising prices: ICRA

The growth in demand for gold Jewellery, in terms of its monetary value, is anticipated to moderate to 6-8% in the current financial year, down from 18% in 2023-24, according to a report by rating agency ICRA.

This slowdown is attributed to consumers delaying high-value purchases amidst a recent spike in gold prices. ICRA also projects a decline in jewelry volume growth following subdued increases of 2% in FY23 and 4% in FY24.

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The agency noted that consumers are likely to monitor price trends closely and adjust their buying patterns over the next few quarters in response to elevated gold prices.

Due to the higher prices, Icra expects recycled gold to constitute a larger share of the total supply, potentially increasing by 400-600 basis points in FY2025.

In FY24, gold prices rose by 14%, contributing to increased revenue for jewelers despite sluggish volume growth. Since the beginning of this financial year, gold prices have risen by 19% compared to the FY24 average, influenced by geopolitical tensions, inflation concerns, and currency fluctuations.