Why Weddings and the Indian Gold Market Affect You

As the world’s largest consumer of gold, India accounts for up to 25% of gold sales annually and its buying trends can shift the world market. Investors must pay close attention to the cycles occurring in the Indian economy, as well as cultural and spiritual calendars that dictate the countries consumption of the precious metal.

In the Hindu religion, Gold is linked to the incarnation of the "Creator" Brahma. In fact, anther name for Brahma is Hiranyagarbha, or "the one born of Gold". For the people of India, this metal infiltrates their everyday lives as they believe it is of the essence of which the world was created and it is an integral part of every aspect of Indian life. The seeking and accumulation of gold is the one thing that connects every aspect of Indian society from the extremely rich to the extremely poor. It is estimated that India has over 11,000 tons of the metal.

One central event in the life of an Indian where gold plays a major part is a wedding. Up to 50% of the cost of a wedding is due to the acquisition and gifting of the metal. What this means is that buying of the metal fluctuates depending on the wedding season. The month of September signifies the end of the monsoon season in India and the beginning of the wedding season and their Diwali festival. This is also the month when India buys the most gold.

With the market recently breaking $1000 an ounce, investors are watching to see what India does in September. High prices may mean that India buys less gold since recent demand is down nearly 30%. Should this happen prices may come down to accompany the demand, but should the Indian demand stay strong it may mean an even further upturn in the prices.

Depending on September gold purchases, investors are gearing up to either buy more of the metal as prices drop or sell as prices soar. They are also paying close attention to China’s response to the market in September as China closes in on India’s domination of the market. India may have less affect on the market than previous years given the buying power and strength of China.

Regardless of the outcome, the month of September in India catches the attention of investors worldwide and can shape the market for months to come.

Host A GOLD Party
Host A GOLD Party