Fad for gold never dips

Fad for gold never dips
Krishnapriya J

The marriage season is here and the brides of Kerala never go gold-less. Jewelers in the city are heavily packed with buyers. Our society seems to run after gold despite the soaring prices and prefer to send their daughters decked with the shining yellow metal, to her groom’s house.  A marriage without gold is almost unthinkable. Traditionally, the marriage season is boom time for gold business and Kerala accounts for 22% of India’s gold consumption annually and India in turn accounts for about one-fifth of the world’s annual gold sales.

                Gold has a hereditary role in the life of our people. The precious yellow metal is dear to them and apart from being a personal asset, gold has become a lifetime investment in the past few years. Even the recent steady increase in gold price hasn’t impacted the total consumption of gold in any way. In fact, the number of people buying gold increases day by day. The price of 8gms gold was Rs.16400/- on the 1st of August; within the past days, the price has sky rocketed touching to 20,000/- .

                Gold’s popularity returns because investors fear inflation and sovereign downgrades and outlook of paper currency in general. All these reasons may not be of much interest to a common man. His lot is to just  keep on worrying as the price shoots up, especially if he has a daughter of marriageable age.

                Mr. Suresh, Showroom Manager of Bhima Jewelers, Trivandrum says, “There has not been any remarkable slowdown in the amount of gold being sold in Bhima even at this heavy rate. In fact, people are in a rush to buy gold a day before the price hikes up again. Another factor behind the increased consumption is the upcoming wedding season.”

                Gold is the most reliable asset and investment as the value of gold never goes down, at least it hasn’t shown any slowdown for the past one year. And that is why young investors are more interested in gold

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                There are various attractive schemes introduced by the jewelers to beat the gold price and to induce people to buy gold. ‘Pay now – collect later’ is one  such. If you have a baby girl, you may start saving gold for her wedding by paying a sum of money monthly, yearly or at whatever convenience you wish.  The amount is then converted into gold coins.  You can cash in your savings for gold ornaments for her.

                Advance booking is a similar service. Pay a token advance for the ornaments you like and the jeweler will hold them for you  till you pay the whole sum. An advantage of this advance booking is that the price is calculated as on the date of booking even if there is a price rise in the meantime.

                The artisans who make gold ornaments also say that there is no relative slowdown in the number of people approaching them for ornaments. Rather, there is a slight increase. Some customers are very particular about getting ornaments custom made by artisans than buying them from a jewellery. The quality of gold, comparatively lesser manufacturing costs and traditional designs are what draw them to these artisans. Trust is also a major factor here. The new fad of  one-gram gold shops are also on the  increase, as the gold price shoots up.

                It is the middle class of our society which bears the brunt as gold prices hit record highs.  They are forced to spend the savings of a life time on 10 or 20pavans.

                Even young people who are vociferous about the practice of decking the brides with gold ornaments, sure seem to have no qualms about accepting it  as the most intelligent investment. Individual investors have been flocking to gold in a way they haven’t for at least a few decades. And the longer we worry about stocks, recession, inflation and government bailouts and spending, the higher gold goes. Yet the consumption will never come down, nor will the lust for gold.