Jewellery franchise sectors is expanding as demand for gold evolve

Jewellery franchise sectors is expanding as demand for gold evolve

According to World Gold Council Indian citizens expects more yellow metal in the current fiscal year 2016-17. But actually due to demonetization or taxation there will be surged in gold prices in coming months. On the other hand rising income of middle class Indians has contributed positively to spending power. Thus there are positives as well as negatives for the jewellery franchise market. According to International Monetary Fund (IMF) per capita income of Indians may grow to 30 percent during 2016-2020. Therefore in coming years there will be more demand for yellow metals in market despite higher rates. Indian especially South Indians are fonder to wearing gold ornaments, for instance, every thousand kilos gold at Tirupati Balaji temple or Venkateshwar Swamy temple located on the seventh peak of Tirumala Hills in Tirupati. People from all over the country visited temple for a little glance of god Venkatesh, an incarnation of Lord Vishnu.
In order to fulfil heavy demands number of jewellery franchise opened in metropolitan cities like Chennai, Mumbai and Delhi. There are two major long term factors that contribute to gold demand.
Gold prices: Higher will be the prices, lower will be demand. For 1 percent increase in gold prices, demands falls by .8 percent. On the other hand if there is 1 percent increase in average rainfall gold demand boosts by 0.5 percent. A good monsoon helps farmers to yield more production; more money will flow into rural areas, in turn, increase spending power.
Income: It is one of the key drivers. Gold industry is completely depending on increasing or decreasing of income level. For example, people show more interest in buying golden ornament when income increases by 1 percent. Therefore, for 1 percent income increments, gold demand increased by 1 percent. Hence it is concluded that gold demand is rise and fall as per income level.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s