News / Asia

India Rushes to Buy Gold as Prices Fall

Girl tries on gold necklace inside jewelry showroom in Mumbai, Apr. 16, 2013.
Girl tries on gold necklace inside jewelry showroom in Mumbai, Apr. 16, 2013.
Anjana Pasricha
Plunging gold prices have prompted a rush to buy gold in India, the world’s most voracious consumer of the yellow metal. The drop in prices will also help the government, whose finances have been strained by the high cost of gold imports.

Madhu Walia has been looking closely at a range of gold bangles and chains at one of New Delhi’s largest retailers for precious jewelry. “Prices have fallen, so I am very much interested to buy," said Walia. "But design I have not liked.”   

High demand

Amid the sharpest drop in gold prices in three decades on Monday, consumers started flocking to jewelry shops. Indians have a centuries-long cultural affinity to gold. Jewelry is gifted to brides on marriages and bought on auspicious occasions such as festivals. However, a five-fold increase in gold prices in the last decade had dimmed the precious metal's allure.

Now, the nearly 20 percent plunge in prices since the start of the year has reignited India’s passion for gold. And, jewelers are upbeat. Sanjeev Agarwal heads the export division of Gitanjali Gems, one of India’s biggest jewelry chains. He says the drop in prices has come just weeks ahead of the “Akshaya Tritya” festival, May 13, considered by Hindus an auspicious day to buy gold.

“Definitely, definitely, [there is] significant increase in footfalls [customers] and enquiries and purchases. It has the benefit of the festival coming next month and also the fact that wedding season is on, so it adds to the quantum of purchases being done.” said Agarwal.

Good deals

There is also increased interest in the wholesale gold market in New Delhi, where traders are clinching more deals than in the past few years. The head of the Delhi Bullion and Jewelers Welfare Association, Vimal Kumar Goyal says orders from retailers have nearly doubled since prices tumbled.  

He says people are getting nearly 20 percent more gold compared to what they would have received in their budget, compared to the start of the year. That has enthused customers.

Although business has been brisk in recent days, jewelers expect it to become even more so in the weeks to come. They say many customers are waiting to watch if prices drop further. They are people like Shipra Chabbra, who has come with her mother to a jewelry shop. “The anticipation is there will be more falling tomorrow or this week, so we are holding on, but that does help the decision, because you tend to save a bit more,” she stated.

No benefit for government

However, while jewelers may benefit from India’s affinity for gold, the government does not. Massive gold imports have strained government finances and prompted several policy measures to moderate gold demand in a country that imports almost all its requirement. Gold imports added up to a record $60 billion in the last fiscal year.  That hefty bill has contributed to a worrying trade deficit.

Indian gold imports have been declining.  They plunged by nearly 25 percent in the first three months this year.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs