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Gold Prices Impact 'Festival of Lights'

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Soaring gold prices are having an unexpected impact on a major religious holiday celebrated in South Asia and many other parts of the world starting Saturday. The Festival of Lights, or Diwali, is the biggest holiday of the year for Hindus and other religions in South Asia and thousands of Hindus are expected to gather in London to celebrate. But one Diwali tradition, buying gold, is changing because of high prices.

It's a busy time of year for jewelers in London's East End. Many in this neighborhood are from South Asia and are celebrating Diwali. Store manager Vikram Santilal says buying gold bars or coins is traditional at this time of year.

"During the Diwali season, you have the days running up towards Diwali and the five days after Diwali, where coins, investment bars will be bought because it's very auspicious to be bought, so you do find people to come in to but that memento as well," he said.

But with the price of gold at an all time high, things are changing. Customers are looking at other precious metals, like platinum. Now only about $300 more an ounce than gold.

"There is change in some people traditionally expected platinum to be an expensive metal, people are looking at it in the same terms as gold values," said Santilal.

Another jeweler, John Jacobs, is seeing a different trend. "The gold price has gone up so high, so what you normally get for 100 pounds earlier, you don't get that much for the same amount, they get a better thing for the same price when it comes to diamond," he said.

Jacobs says both the old and the young are switching to diamonds this year. Their price has remained stable.

"The main difference I have seen is people are moving from 22 carat gold jewelry to diamond jewelry, maybe what they say is true is diamonds are forever, and diamonds always is a lady's best friend," he said.

The economic recession is also affecting Diwali buying, jewelers say in general the pieces are smaller, whether gold, platinum or diamonds.