Gold traders on Akshaya Tritiya high

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Jewellery makers and gold traders are expecting good business this Akshaya Tritiya compared to last year as sales have picked up before the auspicious day despite high gold prices.

Traders said the demand is high for both gold jewellery and coins before Akshaya Tritiya, one of the festivals marking biggest gold buying in India that falls Tuesday.

"We believe business will be good for the industry. I think sales will be high in terms of value and also volume this year compared to last year," Sandeep Kulhali, vice president (retail) at Tata Group's jewellery brand Tanishq, told agencies over phone from Mumbai.

"As gold prices are stable now, people are putting money in both gold jewellery and coins," Kulhali said.

The soaring demand comes despite 10 gram of gold ruling at Rs.28,000, compared to Rs.22,000 during the same period last year. Buying gold on Akshaya Tritiya day, which this year falls on April 24, is considered auspicious.

Kulhali said demand has already jacked up as a lot of customers who were away from the market due to a 22-day strike of jewellers have started to come back.

Bullion traders and jewellery makers across the country had kept their shutters down since March 17, the day after the union budget announcement.

They were protesting a hike in import duty on gold bars and coins, and imposition of excise duty on unbranded jewellery, proposed by union Finance Minister Pranab Mukherjee in the budget for 2012-13. In his budget proposals, Mukherjee doubled the import duty on gold bars and coins to four percent.

Jewellers called off the strike April 8 after assurances from the finance minister that the government would consider their demand for withdrawal of excise duty on unbranded jewellery.

"Thankfully, things have been settled 14-15 days before Akshaya Tritiya. There has been a good demand for gold as customers in the jewellery category do not divert their funds," Kulhali noted.

Rahul Singh, marketing head of Shree Ganesh Jewellery House, one of the largest manufacturers and exporters of handcrafted gold jewellery in the country, echoed Kulhali.

"The demand for gold jewellery and coins has already picked up. The long shutdown has compounded the consumer demand," Singh said.

According to him, people were still considering gold as a valuable asset and investing in it even as prices had shot up.

He said sales figures registered a "decent jump" before this year's Akshaya Tritiya compared to the same period a year ago.

"People are buying gold right now fearing there might be a strike ahead," he stated.

A final decision on revoking the excise duty on unbranded jewellery is yet to come out as parliament is expected to consider and pass the budget for 2012-13 in May. Singh said the high demand for jewellery was also due to the wedding season in April.

Kolkata-based Sawansukha Jewellers also said it is expecting good business this year.

"People prefer buying gold jewellery on Akshaya Tritiya despite high prices," Siddhartha Sawansukha, managing director of Sawansukha Jewellers, said.