Record high gold prices stymie Indians' festive investment appetites
Record high prices and a number of other issues are set to diminish Indian gold demand during its traditional peak season.
The Hindu reports that gold demand usually peaks in India during the current festive season, as purchases of the precious metal are regarded as auspicious.
Record high gold prices, a weak rupee, the slowing Indian economy and competing investment options are expected to weaken the appetites of precious metals investors however, with Amresh Acharya of the World Gold Council saying that "there are a number of issues clouding the horizon."
Gold jewellery exporter Nilesh Gupta of the Bombay Bullion Association points to a shift in consumer attitudes due to lifestyle changes, saying that while Indians would previously purchase gold during festivals or marriages with a fixed budget irrespective of price, consumers are now turning to white goods.
Jewellers are already reporting a marked decline in seasonally adjusted gold sales, with Mumbai merchants reporting that there has been no surge in gold buying at the outset of this year's festive season. Gold purchases reportedly rise 25 – 30% at the beginning of the Indian festive period.