Gold prices may be at record highs, but festive shoppers are still buying enthusiastically,” says Tanishq CEO, adding, “I wouldn’t be surprised if our stocks run out

New Delhi, October 15: The ongoing festive season has injected a notable boost into India’s jewellery market, with Tanishq, the flagship jewellery brand of Titan Company, reporting strong consumer demand even as gold prices soar to unprecedented levels. In the days leading up to Dhanteras and Diwali, sales data reveal a significant uptick in gold purchases, highlighting that traditional festive buying sentiment remains robust despite record-setting gold rates of around ₹1,30,000 per 10 grams for 24-carat gold.

Industry insiders attribute the surge to a mix of festival-driven sentiment and investment-oriented buying, as consumers increasingly turn to gold coins and bars as a hedge against inflation and economic uncertainty. The figures also underscore that the longstanding belief that high gold prices suppress demand may not fully hold in India’s culturally rich and investment-conscious market.

Festive Buying Gains Momentum

Tanishq CEO Ajoy Chawla, speaking to NDTV Profit, highlighted that volume growth in jewellery sales became more evident only after the onset of the festive season.

“Volume growth has started coming in after the start of the festive season. Until Navratri, we saw a lot of customers stay away, and therefore, volume growth was not visible,” he remarked.

Chawla explained that the initial hesitation among buyers reflected a wait-and-watch approach, as consumers anticipated a potential dip in gold prices. Once it became clear that the current high rates were not expected to decline soon, buyers resumed purchases, particularly in the lead-up to traditional festivals that have long been associated with jewellery gifting.

“But now that people have realised that the price of gold is here to stay and is going up, all those fence-sitters have started coming back. The sentiment is clearly back,” Chawla added.

This resurgence indicates that consumer confidence in the jewellery market is recovering after a period of subdued activity, and that cultural and festival-driven demand continues to play a pivotal role in India’s gold consumption trends.

Gold Prices Reach Record Levels

The festive season this year coincides with record-high gold rates, adding a unique dimension to buying behavior. During the same period last year, 24-carat gold was priced around ₹78,610 per 10 grams, but prices have since surged by nearly 65% to ₹1,30,000.

Despite this sharp increase, buyers are not shying away from making purchases, particularly in coins and bars, which are perceived as investment instruments rather than purely ornamental jewellery. Analysts suggest that the surge reflects both festival-driven consumption and financial strategy, as individuals seek to preserve wealth amid global economic uncertainties.

Consumer Sentiment and Fear of Missing Out (FOMO)

According to Chawla, the high prices themselves may be driving demand, as consumers fear missing out on potential future gains in gold value.

“We’re seeing a run on gold, especially on coins and bars — maybe because of investment or FOMO. People are thinking gold prices will go up further,”
he said, emphasizing that the current market behavior is as much about financial security as it is about festival gifting.

Chawla’s comments indicate a shift in purchasing patterns where physical gold — particularly in the form of coins and bars — is increasingly seen as an investment asset, complementing its traditional cultural and ornamental value. The heightened demand for these forms of gold also suggests that buyers are acting quickly to secure their holdings in anticipation of continued price increases.

Potential Stock Shortages

The surge in demand for gold during this festive season has also raised concerns about potential shortages. Chawla acknowledged that despite careful planning, certain segments of gold inventory could face supply constraints.

“There is a bullion shortage in the country. We have planned for it adequately, but I won’t be surprised if we run out of coins. There is a worry among customers that there may be a shortage of gold,”
he said.

This statement reflects both the robustness of festive demand and the challenges of supply management in a market facing record-high prices. Retailers are closely monitoring sales trends to ensure that popular items, particularly gold coins and bars, remain available throughout the key festival shopping period.

Factors Driving Increased Demand

Several factors explain why gold demand in India remains strong despite skyrocketing prices:

1. Investment Demand Surges: According to the World Gold Council, physical investment demand for gold coins and bars has outpaced jewellery purchases during this period. Buyers view gold as a hedge against inflation and global economic volatility, fueling purchases even as costs rise.
2. Cultural and Festival-Driven Buying: Festivals such as Dhanteras and Diwali traditionally prompt families to purchase gold jewellery and coins. This cultural dimension continues to play a dominant role in sustaining demand.
3. Expectation of Future Price Increases: Rising gold prices have led to heightened FOMO, with buyers eager to acquire gold before further increases. Market speculation about ongoing upward trends in gold prices has encouraged timely purchases.
4. Delayed Purchases Resuming: Many consumers had initially delayed buying in anticipation of a price correction. With gold prices now stabilizing at high levels, these “fence-sitters” are returning to the market, boosting overall volumes.

Segment-Wise Demand Trends

Chawla noted that demand is particularly strong for coins and bars, which are increasingly seen as liquid investment instruments. Jewellery items such as necklaces, bangles, and rings have also seen renewed interest, particularly in urban centres where festive gifting and weddings remain significant drivers.

Analysts highlight that this year’s trends differ from previous seasons, as the combination of investment demand and cultural buying has created unprecedented sales volumes. The spike in purchases is also reflected in Titan Company’s retail network, where multiple outlets have reported a surge in footfall, especially in metropolitan cities.

Comparison with Previous Year

The growth in demand is particularly striking when compared to the same festive period last year, when 24-carat gold was priced around ₹78,610 per 10 grams. The current levels represent a 65% increase, yet buyers have shown resilience in their purchasing decisions.

“The sentiment is clearly back,” Chawla remarked, pointing out that the increase in both volume and value of sales indicates renewed confidence among consumers, despite the high cost of gold.

The continued demand also highlights India’s unique relationship with gold, where it is viewed not only as a luxury item but also as a financial safeguard, particularly during periods of economic uncertainty or price volatility.

Supply and Market Challenges

While demand remains robust, the high volume of purchases has stressed supply chains. Retailers are preparing to manage stock shortages, particularly in coins and bullion bars, which are in high demand.

Chawla emphasized that Titan has made adequate planning to meet customer needs, but acknowledged the possibility of running out of certain gold items if demand continues at its current pace.

“There is a worry among customers that there may be a shortage of gold,”
he added, highlighting the challenge of balancing supply constraints with high demand.

Industry observers note that global bullion supply issues, coupled with increased domestic buying, have created tight inventory conditions, necessitating careful management by retailers to ensure availability throughout the festive period.

Consumer Behavior and Investment Trends

Recent reports from market analysts suggest that India’s gold demand is increasingly investment-driven, with buyers preferring coins and bars over jewellery. This trend is fueled by:

• Expectations of rising gold prices, which create urgency in the market.
• Economic uncertainty, prompting households to seek stable, tangible assets.
• Cultural factors, where festivals and auspicious occasions continue to drive purchases of gold.

The World Gold Council notes that physical investment demand now exceeds jewellery demand in some regions, a shift reflecting changing consumer priorities. In many cases, buyers see gold not only as a cultural or decorative asset but as a secure store of wealth in uncertain economic times.

Implications for Retailers and Investors

For retailers such as Tanishq, the surge in festive buying presents both opportunities and challenges. On one hand, the robust demand supports higher sales volumes and revenue growth. On the other, supply constraints, rising bullion costs, and fluctuating market prices require careful planning to maintain customer satisfaction and stock availability.

For individual investors, the trends suggest that gold remains a preferred hedge amid global market volatility. The combination of festival-driven purchases and investment-oriented buying reinforces gold’s status as a dual-purpose commodity — both a traditional cultural asset and a modern financial instrument.

Outlook for the Remainder of the Festive Season

Chawla indicated that demand is likely to remain strong throughout the remainder of the festive season, especially in the lead-up to Diwali, traditionally the peak period for gold purchases in India.

“All those fence-sitters have started coming back. The sentiment is clearly back. People are now accepting that gold prices are high, and they are buying, especially for coins and bars,”
he said.

Market analysts predict that the combination of rising prices, festival timing, and investment-oriented purchases will sustain strong demand levels until the end of the festive period. Retailers are encouraged to ensure adequate inventory to meet consumer expectations, particularly for high-demand items like coins and bullion.

Conclusion

This festive season, gold demand in India has defied conventional expectations, with record-high prices failing to dampen enthusiasm among buyers. According to Tanishq CEO Ajoy Chawla, both jewellery and investment-oriented purchases have contributed to a resurgence in consumer sentiment, highlighting the enduring cultural and financial significance of gold in India.

The surge in demand, particularly for coins and bars, underscores the dual role of gold as both a celebratory asset and an investment vehicle. Despite concerns about potential bullion shortages, retailers are working to meet consumer expectations, while investors view the trend as a reflection of confidence in gold’s long-term value.

As Dhanteras and Diwali approach, the combination of festival-driven purchases, investment considerations, and FOMO is expected to maintain strong demand levels, ensuring that this year’s festive season will be remembered for both record sales and high consumer enthusiasm.