Gold jewellery sales low in India

The high price of gold may be taking a toll on the demand for gold jewellery, particularly in India which is one of the largest consumers of gold in the world, according to recent data.

A new report from Gold Fields Minerals Services has found that the world demand for gold used for jewellery production plunged by 16 per cent last year and this means that price-sensitive regions like India have been most affected.

Many reasons have been given for the slump. Attitudinal changes where the decision to buy gold is not just emotional, but dependent on price, could be a factor while the immense popularity of other precious metals may have taken the shine off gold.

Aggressive marketing campaigns by jewellery firms have promoted platinum, diamonds and other gem stones and these extra options mean that gold jewellery is suffering fewer sales.

However some jewellers remain optimistic and expect sales to pick up again soon.

Rajesh Mehta, the chairman of jewellery exporter Rajesh Exports, told DNA India: "This year has also begun with a slightly lower demand.

"It is five to ten per cent lower than last year but undercurrents in the market suggest that the demand will pick up in April."