As the Hindu festival of Diwali approaches, the jewellery market in Delhi’s Lajpat Nagar is bustling with activity. Shops remain open even on holidays, attracting crowds eager to purchase gold and silver, which are traditionally seen as symbols of wealth and prosperity.
Despite soaring gold prices, which have reached $1,440 for 10 grams, many Indians are still keen on buying gold this festive season. While the high prices have slightly impacted jewellery demand, the cultural significance of gold during Diwali and Dhanteras continues to drive purchases.
Jewellers report a notable trend this year: more customers are buying gold for investment rather than for jewellery. This shift is reflected in market data, with the World Gold Council noting that the share of jewellery in overall gold demand has decreased, while investment demand has increased significantly.
Retailers are adapting to changing consumer preferences by offering lighter jewellery options and smaller gold coins. Many customers are opting for less expensive pieces, allowing them to participate in the gold rush despite high prices.
Experts predict that retail demand for gold and silver will remain strong during the festive and wedding seasons, although some families are feeling the financial strain. The affluent are likely to continue purchasing, while lower-income households may find themselves priced out of the market.
Despite the current high prices, the long-standing cultural affinity for gold in India suggests that demand will endure. Indian households hold a substantial amount of gold, which has historically provided solid returns, contributing to wealth even amid economic challenges.
As the festive season unfolds, many consumers are hopeful for a price drop, allowing them to complete their purchases. The enduring significance of gold in Indian culture ensures that its appeal remains strong, even in the face of rising costs.
