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

Analysis: China Raises Hong Kong Rhetoric to Tiananmen Level

A front-page commentary in The People’s Daily called the current demonstrations 'chaos,' the same word Party officials used 25 years ago to describe the Tiananmen Square protests More

US Airstrikes Anger Syrian Civilians Fleeing Their Homes

Pentagon officials say they have seen no credible evidence of civilian deaths caused by US airstrikes against Islamic State militants More

Child Sexual Exploitation to Worsen in SE Asia

Southeast Asia’s planned economic integration is a key step for boosting the region’s productivity, but carries downsides as well More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid