Gold sales up 30% in Ahmedabad this marriage season

The alliance of gold and marriages in India has been traditional. Gold sales have risen 30% with the onset of the marriage season, which is from August to February.

Amdavadis have bought caskets full of gold despite prices rising to Rs21,000 per 10 gram from Rs17,870 per 10 gram during the wedding season.

Experts feel that rising prices have not hampered sales. In fact, the anticipation of higher prices in the future has only led to bigger investments in the precious metal. According to a World Gold Council (WGC) report, strong economic growth coupled with higher rate of inflation has resulted in higher allocation of people's holding in gold. Indian consumers also use gold as a currency and a hedge against inflation.

Besides higher sales this year, there has also been buying and advance bookings for the next marriage season, said Deepak Choksi, a Surat-based retailer.

Trends have also changed this season and people are now more inclined towards buying lightweight jewellery having a heavy look. However, experts opine that while new designs are in demand, traditional heavy jewellery is still popular when it comes to marriages.

"While gold sales have witnessed a growth of around 25% this season, diamond and platinum jewellery are also in great demand. The sales of diamond jewellery have doubled since the last marriage season," said Manoj Soni of AB Jewels.

According to WGC, India's consumption of gold jewellery is the highest in the world. Some 513.5 tonnes of gold jewellery was sold in India during the first nine months of 2010, witnessing a rise of 73% over the previous year. The festive season (October-November 2010) saw a buoyant market, registering the biggest annual gold consumption.

Interestingly, demand for wedding jewellery, being one of the prime reasons, the gold import at Ahmedabad shot up. In 2010, despite rise in gold prices by more than 20% and touching new highs of Rs21,000 per 10 gram, the people of Ahmedabad have fall on gold to buy as much they can.

In terms of volume, the import increased by 70% in 2010 against 2009. While in terms of value, the gold import was worth of more than Rs26,000 crore in 2009 which increased by almost 100% to around Rs50,000 crore in 2010.

Gold imports in Ahmedabad breaking the trend of past several years have seen an increase of 70% in 2010 as compared to that of 2009. Over years from 2005 till 2009, gold imports in Ahmedabad have seen a sudden spurt in gold imports despite rising prices. 

Experts feel that the traditional formula of decreasing prices and increasing demand does not seem to apply in gold. Gold as always is still considered a safe haven investment.

Despite gold crossing the all time high level of Rs21,000 per 10 gram in 2010, gold imports in Ahmedabad reached the levels of 256.95 metric tonne from the level of 150.80 metric tonne in 2009.
Like Satish Pillai, government servant based in Ahmedabad, many have started investing in gold jewellery for their children's wedding in future.

"I am planning my daughter's wedding in next two years. So I have started investing in gold jewellery from now so that in next two years I will be able to collect gold jewellery for her wedding," he said.