Gold is the topic of the month as India embraces the festival season. Higher vaccination count, lower COVID cases, and pent-up demand could trigger major sales of gold in the fourth quarter of the current calendar year (Q4FY22).

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Remember, 60 to 70 percent of India's gold consumption is in the form of jewellery. As a possible precursor to this trend, gold-buying is on the rise, even as investment demand remains low. Also, high energy prices and high inflation have supported gold buying.

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India Bullion and Jewellers Association Ltd (IBJA) expects gold sales this season to break the 40-year-old record.

So, how much buying can this sector realistically expect during this festival season? To discuss this, CNBC-TV18’s Manisha Gupta spoke to Vaishali Banerjee, MD-India of Platinum Guild International; Tehmasp Printer, MD, IGI, and Somsundaram PR, MD-India of World Gold Council (WGC).

Somsundaram said, “It appears to be one of the best quarters, I wouldn't be surprised if it is the best of this decade. We have seen trade sentiment is quite high, imports have jumped tremendously, and all the buyer-seller meets that we have witnessed so far have been extremely positive. Trade buoyancy is very high. So, as I said, it could be one of the best quarters in probably 10 years.”

He added, “On Dhanteras, you will find quite a lot of bars and coins being bought. You will see a jump, no doubt, in it. But I guess during this quarter because of the pent-up demand in jewellery, people would probably buy jewellery rather than just bars and coins. Although I wouldn't say bars and coins will not grow -- they will grow -- but the growth in jewellery will be far higher.”

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On diamond jewellery, Printer said, “The most important thing is that you get your jewellery -- whether gold or diamonds -- it should be certified. That's because in a situation where demand is really high, it is extremely vital that integrity plays a very important role, so that the customer or consumer gets the confidence that the market is especially made for them.”

“As far as lab-grown diamonds are concerned, we have really taken the lead. India is the biggest manufacturer and IGI is the biggest certifier of lab-grown diamonds, though 95 percent of the consumption is currently in the US. US being a developed and more forward community, people are accepting diamonds or lab-grown diamonds. India is just beginning to start getting accustomed to lab-grown diamonds. Give it an year or two, and lab-grown diamonds will be here to stay, that is for sure.”

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Banerjee said, “I think pent-up demand has come back. This July-September quarter has been a phenomenal one. Q4 of last year was also extremely good after everything opened up. But the current quarter seems to have surpassed even that for many of our large retailers. We are looking at jewellery fabrication also at a very healthy growth rate over the same period of last year.”

She added, “So, I think looking forward to Q4, if we can just continue with this momentum, despite the severe second wave of COVID, we will do phenomenally well. We are getting some excellent numbers, like 40 percent up and 50 percent rise in retail sales. So, I think this is a good start.”

Watch accompanying video for more.

(Edited by : Thomas Abraham)