Gold prices in India’s domestic markets have risen 24% in the past 12 months, driven by conflicts in the Middle East and Ukraine, as well as huge bets by speculators in China, which has overtaken India as the world’s largest gold importer, the Financial Times reported.
Cultural significance
Despite gold’s huge cultural importance in Hindu festivals and weddings, demand for gold jewellery in India fell 6% last year, according to the World Gold Council, compared with a 10% increase in China.
Sales volumes are expected to stagnate until March 2025, according to Crisil, an Indian analytics firm owned by Standard & Poor’s, the newspaper reported.
Titan, the jewellery and fashion arm of India’s Tata Sons, posted a fourth-quarter profit of 7.9 billion rupees ($95 million), below analysts’ estimates, after demand was hit by higher bullion prices.
Despite India’s “passion for gold,” the rising costs will have an impact on families ahead of weddings, said Surendra Mehta, national secretary of the Indian Bullion and Jewellers Association.
He added, “They have two options: either buy smaller quantities or buy smaller carats. I do not expect prices to decline soon.”
Indians are known to collect gold years before their weddings, with some gold saved over generations, but last-minute purchases are often unavoidable.
Reshaping Jewelry
The newspaper quoted the founder of the Wed Me Good website, Mehk Sagar Shahani, as saying that people are resorting to reshaping old jewelry as a result of the “crazy” rise in gold prices, as he described it.
“The rise in wedding costs since the Covid pandemic means that whatever money you spend, it will not be what it was before,” said Vithika Agarwal, co-founder of high-end wedding planning company Divya. “And gold prices are not helping wedding planners.”
