The festive season in India, particularly around Diwali, is driving robust interest in gold purchases, despite soaring prices—over $1,440 per 10 grams. Traditional jewelry demand has softened somewhat, falling from 80% to 64% of overall gold consumption, with a notable rise in investment-driven purchases, now at 35%. Jewelers in busy markets like Lajpat Nagar are adapting by offering lighter jewelry and lower-weight coins to appeal to budget-conscious buyers.
Pushpinder Chauhan highlights increased demand for lighter, everyday jewelry, particularly among younger shoppers. The Reserve Bank of India is also significantly influencing gold demand, increasing its gold reserves to diversify foreign currency holdings. While high prices may deter some lower-income consumers, wealthier buyers are expected to maintain their purchasing power.
Despite the challenges, cultural affinity for gold remains strong in India, promising long-term demand stability as families often turn to gold as a secure investment. Experts predict continued interest in gold, especially given the substantial accumulation of gold assets among Indian households, totaling around $3.8 trillion.
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