Gold prices rose to Rs93,193 per troy ounce, as the precious metal remained a safe haven amidst the European crisis and slow US economic growth.
High prices bode ill for the current festival season, which lasts until roughly mid-November. The wedding season begins then and stretches into late January – both periods during which Indians purchase a lot of gold.
“[Demand] during the festival season won’t be that high for very obvious reasons,” said Karan Vasa, of the Bombay Bullion Association. “But India has a sentiment of its own… they’ll buy less, but they’ll still buy – it’s good luck, and it’s wedding season.”
Gold’s cultural importance during Hindu holidays and weddings cannot be overstated: India’s super-rich can spend in the range of $250,000 solely on jewellery for a single wedding. As beyondbrics has reported, India’s gold obsession extends across the socioeconomic spectrum, and the $950bn worth of gold held by Indian households is the equivalent of 50 per cent of the country’s nominal GDP in dollar terms.
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