Jewellers also said they are recycling old jewellery stock to meet the festive and wedding season demand.
Pre-Diwali Dhanteras sales of gold and silver kicked off on Thursday but overall business is likely to be a muted affair in view of sharp rise in prices and subdued demand due to the COVID-19 induced economic hardship, according to jewellers and industry experts.
Although the buying sentiment has improved after the COVID-19 curbs were relaxed, consumers are still wary of investing in precious metal at current high rates, they said.
Jewellers also said they are recycling old jewellery stock to meet the festive and wedding season demand.
Besides, a caution still prevails among people while coming out of their homes for shopping amid rising COVID-19 cases in key consuming markets across the country, and consumers in view of the pandemic have made advanced booking through online jewellery platforms, they added.
Dhanteras, considered the most auspicious day in Hindu calendar for buying items, ranging from precious metals like gold and silver to utensils, is being celebrated for two days on Thursday and Friday this year.
Gold prices are ruling in the range of Rs 51,000-53,000 per 10 grams, more than 35 per cent higher than Rs 38,096 per 10 gram prevailed on Dhanteras 2019.
Similarly, silver prices have shot up to over Rs 62,000 per kg.
Speaking to PTI, World Gold Council (WGC) Managing Director (India) Somasundaram PR said, "The foot falls are better and people are interested. Sales are recovering but it will not be as good as last year during the same period. The organised players will have better market share, bars and coins will do better."
Digital gold and other online platforms could find this period very conducive for increasing volumes and for broadening the consumer base, he said.
Echoing similar views, All India Gem and Jewellery Domestic Council Chairman Anantha Padmanaban said the market is recovering gradually and the consumer sentiment is positive.
Jewellers are seeing increased growth in footfalls since morning but need to see whether the pent-up demand will translate into sales, he said, adding that the buying momentum is expected to pick up by evening across the country.
"However in terms of volume, we expect to do 70 per cent of last year's business and in value wise similar to last year Dhanteras," he said.
Malabar Gold and Diamonds Chairman Ahammed MP said the pre-Diwali Dhanteras has kicked off with a decent buying season amid pent-up customer demand, revival of the economy and positive consumer sentiment.
The company is geared up for a great buying season with a host of offers to attract consumers interest. "We are expecting encouraging responses from our customers," he said.
Senco Gold and Diamonds CEO Suvankar Sen said the market sentiments have improved substantially since Durga Puja and Navratri.
"The pandemic and the subsequent rise in gold prices have reinforced customers' trust in gold as an asset class."
"Many people have done advance bookings of jewellery for the festive season. So, we are expecting similar sales levels in value terms as that of last year," he said.
However, in volume terms there might be a 15-20 per cent decrease compared to that of last year, he said, adding that the company is expecting new online bookings on Thursday.
Bengaluru-based online jewellery brand Melorra Founder and CEO Saroja Yeramilli said: "We are seeing good demand for lightweight jewellery that we offer at an affordable range. We are expecting 30 per cent growth over last year's Dhanteras sales."
However IIM Ahemadabad's India Gold Policy Centre Chairperson Arvind Sahay said that this year's Dhanteras sales would be better than what trade has been expecting.
"Very likely to see a greater shift to the investment market than jewellery, we are already seeing a good response for Sovereign Gold Bond and ETF.
With decline in prices this week and with consumers with no avenues to spend otherwise are likely to open up their purse, he said.
"Last year Dhanteras was down by 20-30 per cent, so it is likely that the volumes would still match the same as last year and price being higher year on year would help retain margin," he added.