Dhanteras 2023: Discover the Unique Twist in India’s Diwali Gold Rush This Year

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Dhanteras 2023: Discover the Unique Twist in India’s Diwali Gold Rush This Year

During this year’s Dhanteras, the lead-up to Diwali, India is experiencing a unique twist in its traditional gold-buying behavior. The festive season, especially Dhanteras on Saturday, encourages many to invest in gold, with markets bustling with eager customers.

Dhanteras 2023: Changing Gold Buying Trends in India

This year, gold prices have surged, reaching approximately $1,440 (£1,081) for 10 grams. Despite these high prices, Indian consumers are not significantly reducing their affection for gold. Reports from Delhi’s Lajpat Nagar indicate increased foot traffic in jewelry stores, as shoppers seek coins, bars, and jewelry they believe will bring wealth and good fortune.

Price Challenges and Consumer Behavior

The current 60% rise in gold prices has led consumers to adapt their purchasing habits. Jewelry retailers are noticing a pivotal shift in buying patterns, with many customers opting for smaller quantities. Tanishq Gupta, a jeweler in the area, mentions that buyers are still motivated but are purchasing lighter pieces. Retailers now offer coins weighing as little as 250mg, catering to those who are hesitant about spending heavily.

  • Gold prices rose 60%, while silver has surged by 70% this year.
  • Smaller gold coins, including those at 25mg, are gaining popularity.
  • Younger buyers are seeking lighter jewelry options for everyday use.

Investment Focus

Market trends reveal that many consumers are now leaning towards gold as an investment rather than merely for adornment. The World Gold Council (WGC) reports a substantial increase in the proportion of gold demand driven by investment—from 19% to 35%—while jewelry’s share has decreased to 64% in the second quarter of this year, down from 80% in 2022.

Furthermore, exchange-traded funds (ETFs) and digital gold have seen remarkable growth, with September marking record high inflows. The assets in ETFs have surged over 70% this year, indicating a strong demand for gold as a secure investment.

Cultural Significance and Economic Impact

The cultural affinity for gold plays a significant role in maintaining its demand. Despite economic challenges, many households continue to view gold as a stable investment. According to Morgan Stanley, Indian households collectively hold around $3.8 trillion in gold, making up approximately 88.8% of the nation’s GDP.

Experts suggest that while some families are being priced out of the market, the affluent will maintain their gold purchases. Observations indicate that the festive season may keep demand afloat, even against the backdrop of escalating prices. Demand is expected to remain stable in value terms, although actual volumes might decline.

As families prepare for the forthcoming wedding season, many are contemplating their purchases carefully, balancing the desire to adhere to traditions with economic realities. While some are hesitating due to high prices, the long-term outlook for gold in India remains strong.

In conclusion, this year’s Dhanteras marks a shift in India’s gold buying landscape, with an emphasis on investment and lighter pieces, reflecting changing consumer priorities in the face of rising prices.