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

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology 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.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More