Gold demand remains strong this Akshaya Tritiya as high returns attract buyers; experts caution price pullback likely

NEW DELHI: Gold demand in India is expected to remain strong during Akshaya Tritiya this year, despite the surge in prices, as buyers are drawn by the high returns seen over the past two years.

Experts say that despite a surge in rates, there will be accelerated consumer interest in the yellow metal with people moving towards lightweight and studded jewellery.

Commodity experts, however, believe that there will likely be a pullback in gold prices in the coming months, following the recent sharp uptick, with prices crossing Rs 1 lakh per 10 grams.

Rajesh Rokde, Chairman of the Gem and Jewellery Council of India (GJC), told ANI that gold has delivered an annual return of 20-25 per cent over the last two years.

“Last year, on Akshaya Tritiya, the gold price was Rs 72,000/ 10 gm, and in 2023 it was Rs 58,000. With an annual growth rate of 20-25 per cent, this steady increase is attracting numerous buyers. Because of this rally in gold, people are increasingly investing in it due to the strong returns over the past two years,” he said.

Rokde added that India imported 802 tonnes of gold in 2024, compared to 741 tonnes in 2023, showing a clear rise in both value and volume of demand. This indicates that, despite the price increase, gold consumption continues to rise annually.

Saurabh Gadgil, Chairman and Managing Director of PNG Jewellers, said, “This year, Akshaya Tritiya is falling at the cusp of a packed wedding season. We anticipate a strong turnout, both for fresh purchases and for deliveries scheduled on the day. Rising gold prices have accelerated consumer interest in studded jewellery.”

He also noted that many customers are exchanging old gold for new bridal jewellery to manage costs. However, commodity experts offered a more cautious view on gold’s future returns.

Ajay Kedia, Director of Kedia Advisory, noted that while gold has delivered approximately 32 per cent returns since the last Akshaya Tritiya, the coming year may see more modest gains of around 6-7 per cent.

“Gold has delivered an impressive return of about 32 per cent since the last Akshaya Tritiya. However, for the year ahead, it is advisable to buy gold only for ceremonial purposes, rather than with an investment motive, as returns are expected to moderate to around 6-7 per cent, in line with inflation. As a result, a cooling in gold prices is anticipated towards Rs 86000-Rs 87000 level,” he said.

Kaynat Chainwala, AVP – Commodity Research at Kotak Securities, added that global developments are impacting gold prices. She said COMEX and MCX gold prices fell earlier due to an easing US auto tariffs and improved investor sentiment.

“Overall, uncertainty surrounding trade negotiations and upcoming economic data is likely to keep gold prices range-bound in the near term. Further pullbacks cannot be ruled out if sentiment continues to improve, but any escalation in trade tensions could lend renewed support to gold prices, keeping investors cautious and focused on headlines,” she noted.

Manav Modi, Senior Analyst at Motilal Oswal Financial Services maintains a “buy on dips” strategy. “Key support for gold is near Rs 90,000-91,000, and resistance is around Rs 99,000. Long-term targets are set at Rs 1,06,000,” he said. (ANI)