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

Ukraine Purges Interior Ministry Leadership With Pro-Russian Ties

Interior Minister Avakov says 91 people 'in positions of leadership' have been fired, including 8 generals found to have links to past pro-Moscow governments More

US Airlines Point to Additional Problems of any Ebola Travel Ban

Airline officials note that even under travel ban, they may not be able to determine where passenger set out from, as there are no direct flights from Liberia, Guinea or Sierra Leone More

Nigerian President to Seek Another Term

Goodluck Jonathan has faced intense criticism for failing to stop Boko Haram militants 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.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid