Morgan BellIndian Wedding Season increases demand for gold
September 5th 2008 14:08
India is the world's biggest buyer of bullion and the country's wedding and festival season has boosted prices every year since 2002 with September the strongest buying month.
India's wedding season runs from late September to December. Over the past decade, gold has risen by an average of 10.1 per cent from September through to December. Apart from weddings, Indian jewellers also buy the gold for the Hindu festival of Diwali, or the Festival of Lights.
Eighteen of 34 international traders, investors and analysts surveyed by Bloomberg News advised buying gold. Eight respondents said to sell, and eight were neutral.
The jewelry market accounts for about three quarters of the gold sold each year.
India is the world’s number one consumer of gold, accounting for almost a fifth of gold sales.
There are spikes in gold demands both January and September, months when Indian manufacturers typically restock inventories to meet the demands of the two Indian wedding seasons. The first, mentioned above, starts in November and ends in December. The second starts in late March and runs through into early May.
Brendan James
References:
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India's wedding season runs from late September to December. Over the past decade, gold has risen by an average of 10.1 per cent from September through to December. Apart from weddings, Indian jewellers also buy the gold for the Hindu festival of Diwali, or the Festival of Lights.
Eighteen of 34 international traders, investors and analysts surveyed by Bloomberg News advised buying gold. Eight respondents said to sell, and eight were neutral.
The jewelry market accounts for about three quarters of the gold sold each year.
India is the world’s number one consumer of gold, accounting for almost a fifth of gold sales.
There are spikes in gold demands both January and September, months when Indian manufacturers typically restock inventories to meet the demands of the two Indian wedding seasons. The first, mentioned above, starts in November and ends in December. The second starts in late March and runs through into early May.
We have undertaken an analysis to determine whether speculation surrounding the effect of the Indian wedding season is real, or simply an urban legend. Our analysis indicates that the Indian wedding and festival season has a positive effect on gold prices since 2002. This suggests that we could see a strong recovery in the last four months of 2008
Brendan James
References:
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Comment by TimmyH
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Can you HACK it?
Genyration
Comment by Morgan Bell
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bizarre bit of trivia isnt it, i didnt realise India had such an impact on the market!
Comment by Cheryl J
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The preparations and celebrations take place over days and gold is not only used as jewellery buy is often woven into the elaborate wedding saris. Plus, as is customary, gold gifted to the bride is called "stridhan" and this is exclusively her property in her new house. She has full rights on this gold, which also acts as an insurance against hard times and only she can decide on what to do with this gold.
I have no doubt the demand would increase each wedding season.
Comment by Morgan Bell
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thanks for your thoughtful response!
India has a facinating culture and i was quite surprised to learn of its effect on worldwide investments
Comment by Cheryl J
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It's also a very dynamic up and comer in the IT world.
This was a really interesting article Morgan. Great from a business perspective and I have to say I loved the pictire of the henna painted hands.