Bhubaneswar, Oct 23:A sharp correction in gold prices is raising hopes of a festive sales boost for jewellers, as the industry looks to draw shoppers back to showrooms ahead of Dhanteras and Diwali.

The 22-carat gold rate in Bhubaneswar fell to around Rs 1.29 lakh per 10 grams on Friday, down from around Rs 1.37 lakh earlier this month. The decline offers some relief to households preparing for festive purchases, although uncertainty over further price movements could keep some buyers on the sidelines.

Siddheswar Rath, Marketing Manager at Malabar Gold and Diamonds, Bhubaneswar, said the price correction could encourage more consumers to visit jewellery stores. He has already observed a steady rise in customer footfall over the past two days.

Also read:Product launch: Ducati Formula 73 sold out instantly after its luxury launch in India

While Rath declined to disclose sales figures, he said the company expects this year's festive performance to exceed expectations. Malabar is focusing on lightweight jewellery, which has been attracting consumer interest, while also introducing new collections ahead of the festive and wedding seasons.

The retailer is offering an advance booking facility that allows customers to reserve jewellery by paying 10 per cent of the amount, helping them guard against a possible rise in prices.

Manoj Jain, Director and Head of Commodity and Currency Research at Prithvi Finmart Pvt Ltd, said the correction could lift consumer sentiment. However, he expects purchases to remain largely driven by tradition and occasion-based demand.

Jain said consumers could focus more on the number of purchases than the weight of individual pieces, as lower prices influence how they allocate their budgets.

A Kotak Securities analyst said festive demand was likely to remain firm, although price volatility could influence buying patterns. The analyst expects gold prices to remain soft in the coming weeks amid elevated crude oil prices and geopolitical tensions, with bond yields providing the only significant support to prices. Given the uncertainty, consumers may opt to stagger their purchases rather than commit their entire festive budget at once.

The correction has also extended to gold-backed investments. Gold exchange-traded funds (ETFs) declined during Friday's session, with several funds falling by more than 1 per cent. Silver ETFs recorded steeper losses of nearly 3-4 per cent. Despite the recent weakness, Indian gold ETFs attracted net inflows of Rs 4,450.61 crore in September, up 71 per cent from August.

With Dhanteras and Diwali approaching, jewellers are counting on the price correction to translate into actual purchases. Whether the lower rates prompt consumers to buy now or wait for further declines could determine how strongly the festive season unfolds.