All That Glitters Is Gold

Demonetisation may have impacted the industry in the short term, but demand for India’s favourite metal has not faded away. From new colour variations to designs sporting diamonds and other precious stones, Indians are experimenting with gold like never before.

- Sneha Mahale

INDIANS LOVE GOLD. NO WEDDING IS COMPLETE WITHOUT IT. It is considered an investment given its unique financial properties—liquidity in times of need and a useful hedge in times of crisis. It is also a symbol of prosperity and the harbinger of good luck, and commands an important place in Indian rituals and ceremonies, whether religious or cultural. The yellow metal is perceived to be highly auspicious, so much so that idols of gods and goddesses are decorated with gold ornaments.

In India, jewellery is purchased not only for personal use but also for gifting on special occasions. It is passed on from generation to generation, exemplifying its importance in local cultures. That explains why even after a steep price rise, the demand for gold never falls. Our fascination for the yellow metal has also meant that today Indians hold a record 23,000 tonnes to 24,000 tonnes of gold worth $800 billion (approximately ₹54.51 lakh crore), according to a 2017 study by the World Gold Council. This makes Indian households the world’s largest hoarders of the yellow metal.

Demand and supply

The demand for gold is seasonal in the country and peaks around Dhanteras and Akshaya Tritiya. Demand is also on the higher side during the wedding season, which typically extends from October to May, and peters out during June and July. Smaller purchases, however, continue to happen throughout the year. But things are changing slowly. “With millennials, trends have changed. Today, there are newer occasions/reasons to buy gold apart from baby showers or the birth of a child. It could be professional success/achievement, etc. This has created more demand for the metal and keeps its popularity unchanged even when the government imposes new policies,” says Vipin Sharma, CEO, Azva.

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