India's wedding season to lift gold prices
The wedding season in India increases the country's appetite for gold with several kilos of gold bought and worn on each occasion.
Posted: Friday , 16 Nov 2012
MUMBAI (MINEWEB) -
The wedding season in India is an occasion that demands a much bigger spending spree on gold than any other festive season in the country. Not only is a wedding one of the most precious facets of a person’s life, for the onlookers and visitors to the nuptials, it is an occasion to show off one's jewellery.
Many Indians also use the excuse of a wedding to pander to the wishes of the bride or groom with regards to their preferred gift. Given the fact that gold has yielded positive returns for several years, it is also the most favoured gifting option at wedding times.
Most families and friends offer the new couple gold bars and coins as presents.
With several more auspicious wedding dates lined up end 2012 and through 2013, traders and bullion retailers expect the price of gold to score several new highs.
"Parents these days prefer to buy gold for their children's wedding. Earlier, they would invest in the stock market or even buy real estate. Now, the favourite item is gold,'' said Jayeshbhai Solanki, bullion retailer.
Moreover, while the stock market in India has yielded a gain of around 90% from 2008 to the current period, gold has jumped 136% during the same period.
Gold is traditionally the most popular precious metal investment in India. Most times, brides are often weighed down by their jewellery in a display of wealth and economic status,'' said Solanki.
More than half of the money Indians spend on gold goes to jewellery for the over 10 million weddings held in the country each year.
Though most families which are to have a wedding look out for price dips in the months before to stock up on the yellow metal, Indian buyers are always on the lookout for deals when buying wedding gold, with the price rarely a deterrent.
Gold House owner, Manjul Seth Kakadia, said gold is the safest bet for investments amidst uncertainty in other investment avenues. ``The price of the yellow metal is set to soar in the next few weeks. It has already seen a big jump in India due to high prices of gold across the world and a weakening rupee.''
Kakadia spoke about the sheer retail frenzy that he had witnessed at a wedding mela in Jaipur recently. A mela is a festive retail occasion to purchase goods related to the wedding.
The Pink City, as Jaipur is fondly called, started the whole trend of elaborate `pop up festival buying shops', which entice shopaholics to grab some of the best bargains. "People were buying up chunky pieces of gold jewellery and elaborate gold bangles for the wedding season ahead. Even if all of it cannot be worn, some of it can be handed over as presents to the wedded couple,'' he said.
"Gold will surely shoot to a new high by the end of this year. As India's population gets richer, and one needs to only look at any one Indian wedding to understand how richly, gold demand and consumption is bound to increase,'' Solanki added.