India’s affinity for gold is deeply rooted in its culture, traditions, and economic landscape. From the sacred hues of a bride’s wedding jewellery to the auspicious glint of gold coins during Diwali, this precious metal holds a special place in the heart of every Indian household. I have witnessed first-hand how this enduring love for gold shapes not only domestic demand but also ripples across global bullion markets.
Gold in India is more than just an asset; it is a symbol of prosperity, status, and security. Its significance is deeply embedded in cultural rituals and seasonal festivities, which create predictable cycles of demand.
10 m weddings annually
With an estimated 10 million weddings annually, the Indian wedding season accounts for nearly 40% of the country’s gold demand. Gold jewellery is seen as an essential part of the bride’s trousseau and an auspicious gift for families to exchange. Nearly 30 per cent of the total gold consumption is kept as bullion and the remaining 70 per cent is converted to jewellery. Additionally, festivals such as Diwali, Dhanteras, and Akshaya Tritiya are considered prime occasions for buying gold, driven by the belief that it brings wealth and good fortune.
Beyond cultural practices, gold is also a preferred investment vehicle for Indian households. Rural and urban consumers alike consider it a safe haven against inflation and currency fluctuations. Gold’s liquidity and enduring value make it an ideal choice for savings, especially in times of economic uncertainty.
India’s massive appetite for gold has a direct impact on global bullion markets. As the world’s second-largest consumer of gold, India accounts for nearly 25 per cent of global demand. This demand fluctuates with domestic factors such as seasonal buying, geopolitical events, and changes in import policies, influencing gold prices worldwide.
Dhanteras impact
Global gold prices often see a spike during India’s wedding and festive seasons. For example, the demand during Dhanteras alone can push prices higher, as jewellers and consumers rush to purchase gold in large quantities. The marriage season, festivals and pushya nakstra daysplay a significant role in gold demand. The demand during non-auspicious days significantly reduces.
The Indian government’s gold import policies and taxation can significantly affect global supply and demand dynamics. For instance, changes in import duties or the introduction of hallmarking standards can alter buying patterns, creating ripples in international markets.
Rural India, where gold is both a status symbol and a form of savings, constitutes over 60 per cent of the country’s demand. Fluctuations in agricultural income due to monsoons or government policies can directly influence gold purchases, further affecting global prices.
New trends
While traditional buying patterns remain dominant, new trends are reshaping India’s gold market:
The rise of digital gold platforms is revolutionizing how Indians invest in gold. These platforms allow consumers to buy and sell gold in small quantities, providing convenience and security while appealing to younger, tech-savvy investors.
The government’s push for mandatory hallmarking has enhanced consumer trust and encouraged more organized trade, driving demand for certified and quality-assured gold.
With growing awareness of sustainability, India’s gold recycling market is gaining traction. Consumers are increasingly opting to trade old jewelry for new designs, reducing reliance on imports and supporting domestic supply.
No signs of love affair fading
India’s love affair with gold shows no signs of fading, but it is evolving. The country’s demand will continue to influence global markets, making it crucial for policymakers, traders, and industry stakeholders to align with emerging consumer preferences and regulatory changes.
As we move forward, the focus must be on striking a balance between preserving cultural heritage and embracing modern practices. By fostering transparency, innovation, and sustainability, we can ensure that India’s gold market remains a cornerstone of both domestic prosperity and global bullion dynamics.
In conclusion, India’s cultural and seasonal demand for gold is not just a reflection of tradition but also a powerful force driving global gold markets. By understanding and adapting to these trends, we can harness the potential of this timeless metal to benefit millions of consumers and stakeholders alike.
The author is VP of India Bullion & Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures Pvt. Ltd.
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