Gold at ₹1.48 Lakh: Festive Buyers Trade Down, Not Out

This Dussehra, record gold prices did not wipe out jewellery demand—they recast it. Gold touched ₹1.48 lakh per 10 gm, up 35% from ₹1.10 lakh a year earlier, and overall jewellery sales held roughly flat in value. But volume had already slipped 15% year on year during Ganesh Chaturthi, and jewellers are now looking to Dhanteras for a revival.

The anchor price moved

For Indian buyers, gold’s festive price is a reference point, not just a cost. When that reference jumps 35% in a year, the same 22-carat purchase suddenly feels like an overreach, even if the budget technically exists. Shoppers responded not by abandoning the ritual but by redefining what counts as a legitimate festive purchase.

Behavioural scientists describe this as a reference-price shift. When the baseline jumps sharply, consumers do not just compare today’s price with yesterday’s. They compare the whole benefit of a heavy 22-carat piece with cheaper ways to keep the festive promise. That makes a 9-carat necklace or a lab-grown diamond “good enough” in the customer’s mental ledger.

Buyers traded down, not out

Industry executives saw a clear shift toward 9-carat and 14-carat gold, lighter weight designs, and diamond-studded pieces in the ₹1.5–3.0 lakh range. Kama Jewelry managing director Colin Shah noted that buyers still wanted the tradition of gold on auspicious days, but they chased value. Young and first-time buyers especially leaned into lightweight options.

At Zen Diamond India, lightweight and studded jewellery already accounts for 65-70% of the catalogue and was the biggest contributor to festive growth. Neil Sonawala, the brand’s managing director, said consumers “are increasingly looking for pieces that can transition seamlessly from everyday dressing to festive occasions.” Diamond studs, delicate pendants, stackable rings and understated earrings gained ground.

• Versatility wins: pieces that work daily, not only in festivals, outsold heavy occasion wear.
• Lower-carat entry points: 9-carat and 14-carat collections made gold feel accessible again.
• Alternatives scale fast: lab-grown diamonds tripled sales for Limelight during Dussehra while the brand doubled its store network.

Lab-grown diamonds took the gap

Limelight Lab Grown Diamonds tripled its sales year on year this Dussehra. Managing director Pooja Madhavan said consumers are buying diamond jewellery for personal use and weddings, rather than treating it purely as an asset to store. She added that tier-2 and tier-3 cities are emerging as important growth markets for lab-grown diamonds.

What marketers should do

When a reference price rises sharply, demand often repositions instead of disappearing. The brands that win are those that offer an accessible version of the ritual, not just a discounted version of the old product. That means lower-carat lines, lightweight designs, alternative stones and messaging around everyday wearability.

For any premium category, the lesson is clear: if your core price anchor moves up, build a bridge product before consumers build their own exit.

Source: ETRetail.com