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With debt concerns in US and Europe looming large, investors are betting on safer investment havens like gold pushing the price of the precious metal to record levels. But that may not mean good news for India's largest jewellery retailer, Gitanjali Gems which is expecting a dip in volumes. With gold prices zooming to record levels each day, the metal seems to have lost its silver lining for the Indian consumer. The company expects a 10 per cent fall in volumes. tiffany outlet Gitanjali Gems had planned to add 400 retail outlets to the 3,600 points of sale across India. Now the plan seems to be losing its steam because of high gold prices. Mehul Choksi, Managing Director of Gitanjali Gems said, “We are expecting gold prices to affect our volumes. We may see a 10 per cent fall in volumes.” Gold prices have appreciated by more than 30 per cent this year. And though India's gold consumption in the last quarter has grown by 38 per cent compared to 248 tonnes of the previous year, analysts are expecting volumes to drop this quarter given the furious run of the yellow metal. Gaurang Shah, assistant vice president of Geojit BNP Paribas Financial Services said, “The prices of gold seem too high to be affordable. This in turn will have an impact on the stocks of companies that use gold as an input as their balance sheets may stop looking interesting with numbers not being too encouraging.” Though volumes of gold jewellery could see some decline for now, companies are hoping that the festive season will add glitter to gold sales once again.
