Gold Market: Will India’s Love Of Gold Ever Diminish?
Still a key part for many of their spiritual heritage, gold continues to remain popular in India. With the country’s rapid development and influences from the West in recent years, how long will India’s love affair – with all its traditions – last for the precious metal?
Over the past few decades, many large Western corporations have developed a strong presence in India. Visitors arriving in cities such as Mumbai, for instance, will notice new highways, and buildings that dominate the skyline such as the residential twin Imperial Towers.
India has become high-flying and tech-savvy. Yet parts of the country still remain extremely poor and this has a direct bearing on how gold performs.
For instance in 2015 for the festival of Akshaya Tritiya, demand for gold was slow but did increase later. The reason may have been in part due to the unseasonable weather conditions which badly hit rural communities.
Festivals such as Akshaya Tritiya, Diwali and Dhanteras are key times for buying gold.
An influence for many is Lakshmi – the Hindu goddess of love, prosperity, wealth, fortune, and the embodiment of beauty. She is depicted as wearing clothes embroidered in gold and her four hands suggest that those who worship her will gain. Particularly in Hindu and Jain cultures, gold is considered to be auspicious.
Gold, however, is popular in India not only for spiritual reasons but also for practical reasons too as an investment. Its portability means that gold can be stored anywhere. Reputable dealers – such as Gold Investments Ltd – offer investors the option of keeping gold in secure bank vaults if they wish.
For many, the precious metal’s appeal is that it is not dictated to by economic factors which can often have a knock-on effect across different global regions.
Gold Investments Ltd, for instance, saw demand for gold increase during the last financial downturn as savvy investors moved some of their portfolio assets into gold. Gold became a safe-haven. This is the same pattern the family business has seen since it began trading in 1981 whenever economies have been slow. Despite its pricing fluctuations, gold has always performed well historically.
Investors such as – Jim Cramer (worth around $100 million) – advises that gold should be part of any investment portfolio. He believes portfolios should have no more than 10 to 15 stocks and consist of high-yielding stocks, healthy geographical stock, speculative stocks, and gold.
"I think that 10 percent is the upper limit because I consider gold as an insurance policy and no worthwhile insurance policy should be 20 percent of the money you have invested," Cramer says.
Will Gold Still Shine?
As India develops further will gold still shine? Will it still be as relevant as it always has been? The answer lies in the next generation.
For many families in India gold is still very personal. Often the precious metal is saved for as soon as there is a birth of a girl as part of ‘Stridhan’ – to give financial security in life – as per Hindu Law.
Next time will Gold for India still shine?