News / Asia

Record High Gold Prices Do Not Impact Consumption in India

Customers look at gold jewelry at a shop on the occasion of a Hindu festival 'Akshay Tritiya' in Allahabad, India, 16 May 2010
Customers look at gold jewelry at a shop on the occasion of a Hindu festival 'Akshay Tritiya' in Allahabad, India, 16 May 2010

Multimedia

Audio
Anjana Pasricha

Record high prices of gold have failed to dent its consumption in India – the world's largest market for the precious metal.

R.K. Garg, 50, and his wife are shopping for gold earrings at the Gold Souk Mall in Gurgaon, close to New Delhi. Prices are up by 25 percent since he bought gold jewelry for his daughter's wedding last year, but he says he has no choice except to buy another piece.

"For the first anniversary we have to give some gift to her," Garg said.

Model displays newly launched gold jewelry on the eve of Hindu festival ‘Dhanteras’ in Calcutta, India (file photo)
Model displays newly launched gold jewelry on the eve of Hindu festival ‘Dhanteras’ in Calcutta, India (file photo)

A centuries-old tradition of gifting gold at marriages and other occasions and buying it during festivals is keeping the gold market buoyant in India, although prices are hovering around $1340 an ounce – an all-time high.

The economic recession and a drought had led to a sharp fall in demand, last year. But those memories have faded as the Indian economy grows briskly once again and good rains this monsoon season boost farm incomes.

Wedding season, new designs

As the main festival and wedding season gets underway, jewelers are getting ready with new designs and attractive offers to lure customers.

Rajinder Bhola's jewelry shop at the Gold Souk is buzzing with customers. He says he sees fewer casual customers walk in to buy pieces of jewelry, probably due to the high prices.

But Bhola says demand for jewelry to be presented at weddings remains consistent. And, in a country where two-thirds of the billion-plus population is under 30, the number of marriages is on the rise.

"The growing population, and then the weddings, and then very basic needs like all women in India wear a chain, and ring and bangles, these are the primary things which people have to buy," said Bhola.

Good investment

It is not just the cultural affinity with gold that continues to fuel demand.

In Mumbai, Associate Director at the World Gold Council in Mumbai, Keyur Shah, says the massive jump in prices in recent years has only reinforced the centuries-old belief that gold is a time-tested asset.

"Indian consumers are not afraid of the price level," Shah said. "In fact it reiterates their confidence if prices consistently go up in gold. They always feel they made a wise decision to buy gold say two years back and wish they had bought more."

Belief that gold is a good investment is also spurring the sales of gold coins and gold bars. And, it is not just prosperous, urban centers where gold is selling. Demand is also high in rural areas where other investment options such as banks and stocks are limited. Rural areas account for nearly two-thirds of gold purchases in the country.  

A report by the World Gold Council says India and China are set to be the driving force behind gold demand.

The World Gold Council's Shah says prosperity is driving demand in these countries.   

"If you look at the retail demand globally, consumption in India and China is on the rise and it is mainly due to rising incomes of the middle class," he added.

That includes people like Somya Misra, who will be getting married in January. She is going around jewelry shops to decide what she would like to pick up. The bride-to-be is not worrying about prices, but what pieces she wants.

"If marriages are happening, people are buying gold, irrespective of price, so I think till the time marriages continue in the same spirit in India, the purchase of gold is going to be high," Misra said.

That is what jewelers across the country are hoping will happen, helping them pull in good profits.

You May Like

Video China Investigates Powerful Former Security Chief

Analysts say move by President Xi is an effort to win more party support, take step toward economic reforms, removing those who would stand in way of change More

South Africa Land Reforms Still Contentious 20 Years Later

Activists argue that the pace of land reform is slow and biased; legal experts question how some proposed reforms would be implemented More

In Vietnam, Religious Freedoms Violated, UN Finds

Beliefs reportedly prompt heavy surveillance, intimidation and travel restrictions More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Gazans in Shelled School Sought Shelteri
X
Scott Bobb
July 30, 2014 8:16 PM
Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video A Summer Camp for All the World

VIDEO: During workshops and social gatherings, the Global Youth Village summer camp encourages young people to cooperate and embrace their differences, while learning to communicate with people from other countries. VOA's Deborah Block has more.
Video

Video From Cantankerous Warlock to Incorruptible Priest, 'Harry Potter' Actor Embraces Diverse Roles

He’s perhaps best known as Mad Eye Moody, the whimsical wizard in the Harry Potter franchise. But character actor Brendan Gleeson's resume includes dozens of films, and he embraces all the characters he inhabits with equal passion. In an interview with VOA’s Penelope Poulou, Gleeson discussed his new drama "Calvary" and his secret to success.

AppleAndroid