As gold prices have soared over 50% this year, shoppers are swapping their old jewellery for new pieces instead of investing more funds, turning the festive season into a gold exchange bonanza.According to executives cited by ET, the share of gold exchanges in total sales reached a record level. Tanishq, owned by Tata, expects exchanges to make up nearly 50% of sales on Dhanteras this year, a major rise from 35% last year. Reliance Retail reported that roughly a third of its jewellery sales now come from exchanges, up from 22% previously, while Kolkata-based Senco Gold said the proportion has increased from 35% to 45%.Reliance retail chief financial officer Dinesh Taluja said that rising prices have prompted customers to recycle old gold jewellery, rather than investing into new pieces. Last week, he told analysts, “Average bill values are up pretty substantially (due to price increase). Now what has happened across the industry is that volumes have gone down because the purchasing power has been impacted due to a significant increase in gold prices.” He further added that the volume will pick up as the yellow metal’s prices become stable.Gold prices reached Rs 1.34 lakh per 10 grams, including the 3% goods and services tax, on Dhanteras (October 18), up 69% from Rs 80,469 on the same festive day last year. With an estimated 22,000 tonnes of idle gold in Indian households, many shoppers are opting to exchange old family jewellery rather than buy entirely new pieces.To attract buyers, Tanishq rolled out a zero price-deduction scheme on gold exchanges across all caratages this festive season. During Navratri, old gold exchanges accounted for 38-40% of the brand’s total sales, chief executive officer Ajoy Chawla told ET ahead of Dhanteras. “We see this number touching about 50% of sales by the end of Diwali,” he added. Tanishq did not disclose final Diwali sales figures as parent company Titan is in a quiet period ahead of its quarterly results.Titan, in a regulatory update, reported a 19% year-on-year growth in domestic jewellery sales for the July-September quarter. The company said higher gold prices offset a slight decline in buyer numbers, while promotions and exchange schemes helped stimulate demand.Industry experts noted that the rise in gold exchanges was largely confined to northern, western, and eastern India, with southern consumers preferring to accumulate new gold. India consumes 800-850 tonnes of gold annually, with the south accounting for 40% of total demand.Festive buying and old gold exchanges are largely driven by non-South markets, Kalyan Jewellers executive director Ramesh Kalyanaraman told ET. For the Kerala-based chain, markets outside the south contribute around 30% of sales. He also highlighted strong demand for gold and silver coins during Dhanteras-Diwali, which exceeded supply in some regions.Senco Gold managing director Suvankar Sen noted that both bridal and personal jewellery purchases increased via old gold exchanges this Dhanteras.Following the festival, a dip in gold prices has cheered jewellers, who hope it will boost demand for the upcoming wedding season. Gold was trading around Rs 1.26 lakh per 10 grams with GST on Friday evening, down over Rs 7,900 from Dhanteras.Nigel Green, CEO of global financial advisory firm DeVere Group, “After an extraordinary run, the market needed a pause, a moment to catch its breath, and that’s exactly what we’re seeing now.
