Gold prices have seen a significant surge this quarter, crossing the ₹8,800 per gram mark, prompting jewellers to adjust their offerings to maintain customer demand amidst rising prices. The yellow metal’s price spike has been driven by global geopolitical tensions and trade uncertainties, leading many customers to reconsider their jewellery purchases during the busy wedding season.

According to Ramesh Kalyanaraman, the executive director of Kerala-based Kalyan Jewellers, “What happens usually is whenever there is a sudden spike of gold price or sudden fall of the gold price, the customer takes a pause to see the direction of what is happening. There have been three spikes almost in this (January-March) quarter. Of course, the pause cannot be more than 10-15 days.”

The price rise comes at a time when the wedding season is in full swing, a period which traditionally accounts for a large share of the jewellery industry’s revenue. Kalyanaraman notes, “almost 60 per cent of the revenue comes from weddings and related shopping.” However, he acknowledges that while customers may delay purchases in the short term, the wedding season eventually drives them to make purchases despite price fluctuations.

In 2024, gold prices increased by 26 percent, marking one of the best years for the precious metal. This surge had a tangible impact on jewellery demand, which declined by 2 percent to 563.4 tonnes in 2024 from 575.8 tonnes in 2023, according to the World Gold Council. Kalyanaraman adds, “customers typically walk in with set budgets. Therefore, when prices have gone up, their volumes may come down.”

In response to this shift, jewellers have introduced more affordable alternatives. For instance, Kalyan Jewellers has expanded its offerings in 18-carat gold, which provides a 15-20 percent price difference compared to 22-carat gold, making it more accessible to customers. “When you do 18-carat jewellery, there is a 15-20 per cent rate difference. That makes it more easy to buy jewellery even if the prices have gone up,” says Kalyanaraman.

Similarly, in the diamond jewellery segment, where gold is typically 18-carat, Kalyan has introduced 14-carat gold options to make products more affordable. This shift towards lighter, more budget-friendly pieces is part of a broader trend in the industry.

“We are also observing a shift in consumer preferences with a growing inclination towards lightweight, rose gold, and white gold, primarily among younger customers,” said Saurabh Gadgil, the Chairman and Managing Director of PN Gadgil Jewellers. “We also anticipate that by 2029, the demand for 18-carat gold will increase significantly, bringing further opportunities for growth in the industry.”

In terms of expansion, Kalyan Jewellers is planning to open 170 new showrooms in the upcoming financial year, including 90 under the Kalyan brand and 80 under its lifestyle jewellery brand Candere. Kalyan recently completed the buyout of Enovate Lifestyles, which operates the Candere brand, and is transitioning it to an omnichannel model. Kalyanaraman mentioned, “Candere is in a transformation phase. It was a 100 per cent digital company. The focus was completely online. From last year, we have started offline also. In the next financial year, we will start brand campaigns and store expansion will also happen.”

The company has set an ambitious ₹1,000 crore revenue target for Candere over the next 2-3 years. As part of its expansion strategy, Kalyan Jewellers is focusing on markets outside of southern India, with plans to open 75 of its 90 new Kalyan showrooms in non-southern regions, as well as international markets in the US, UK, and the Middle East.