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


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

Afghanistan, Pakistan Leaders to Hold Icebreaking Talks in Paris

Two sides are expected to discuss ways to ease bilateral tensions and jointly work for resumption of stalled peace talks between Afghan government and Taliban officials

Corruption Busting Is Her Game

South African activist is building 'international online community of thousands of corruption fighters'

Former SAF Businessman Gives Books, Love of Reading to Students

Steve Tsakaris now involved in nonprofit Read to Rise, which distributes books in Soweto, encourages lower-grade primary school students to read

This forum has been closed.
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.
Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continuesi
Ayesha Tanzeem
November 25, 2015 10:46 PM
One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continues

One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs