'Akshaya Tritiya' spurs moderate gold sales on day one

Enlarge Photo A customer selects one-carat gold bangles during an exhibition in Jammu April 13, 2008. India's...

Wed, May 7 08:22 PM

MUMBAI (Reuters) - India's gold buying festival, Akshaya Tritiya, saw moderate sales on the first day with consumers' appetites hit by high gold prices, jewellers said.

"Last year, people were buying five to ten coins each; this year, just one or two," said T.K. Chandiran, managing director of KTM Jewellery Ltd in Coimbatore.

The jewellery chain, that has outlets mainly in Tamil Nadu, sold only about half of what it could sell last year, Chandiran said.

Akshaya Tritiya, when many people particularly in south India believe buying gold will invoke prosperity, is being celebrated on Wednesday and Thursday.

The festival accounted for sales of around 80 tonnes of gold last year, according to an official from World Gold Council.

Gold prices on Wednesday were lower than the previous day at 11,581 rupees per 10 grams on the Multi Commodity Exchange of India Ltd's (MCX) continuation chart at 7:32 p.m., but higher by 26 percent on year.

"The response today was mediocre, but we are expecting a good response tomorrow," said Rajesh Mehta, chairman of Rajesh Exports Ltd, which has 35 jewellery stores countrywide.

Mehta said advance orders -- when people book their gold by paying a part of its cost and taking delivery on Akshaya Tritiya day -- were flat on year.

Titan Industries Ltd's gold division, Tanishq, also said advance orders were flat on year, but could rise as consumers can visit shops on Thursday as well.

"I think sales (on Wednesday and Thursday) would be better than last year," said V. Govind Raj, vice president -- retail and marketing at Tanishq.

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