Ms Deepa Mohan bought 20 gm of gold coins for her 10-year-old daughter, Ashwariya on Akshaya Tritya this year. She has been buying gold jewellery on the auspicious occasion for the last few years. Asked why she prefers buying gold coins than jewellery, she said: “It gives me the flexibility to convert it to jewellery when required or cash at at prevailing market prices in case of emergency,” says Ms Mohan.
Latest trends in gold sales show a marked preference for coins over jewellery.
Jewellery serves dual functions—a very liquid store of value, which can be converted to cash easily, and lifestyle gear. The preference for coins over jewellery reflects changing perceptions in both. The coins, come as they do in sealed, tamper-proof laminations with a guarantee of purity, store value better than jewellery does. Also, the jewellery is more of a fashion statement these days and fashion changes fast. Those who have no immediate need for jewellery prefer to keep gold in the form of coins and convert them into the ‘trend of the time' ornaments.
The largest bank State Bank of India expects to sell 50 per cent more — about 4,000 kg of gold coins in the current financial year. Indian Overseas Bank sold 400 kg of gold coins exceeding its target of 300 kg during Akshaya Tritya last week.
Mr K. Shivram, Director, World Gold Council, said: “We are seeing a recent trend with the spike in gold prices people have shifted to buying coins and bars.”
Coins sold by banks come at a premium of 7-8 per cent than those sold by local jewellers. Despite the premium charged by banks- people prefer to buy coins from banks as they come in international, sealed, tamper proof package and ‘creditability' factor plays an important role, said Mr Shivram.
Margins cut
Banks have cut their margins from 10-15 per cent four years ago when they started selling coins to 7-8 per cent currently. Bank of Baroda offered a discount of 2 per cent and SBI offered 1.5 per cent discount, while selling coins for Akshaya Tritya last week.
Banks are reticent to talk about the margins they make but a bank manager said banks earn Rs 60-100 for every gram sold.