With gold scarce, India’s Hindu festival season loses its shine

November 1, 2013

(An artist blows gold powder paint on an idol of Hindu Goddess Laxmi (goddess of wealth) ahead of Diwali festival in the northern Indian city of Chandigarh October 19, 2008. REUTERS/Ajay Verma )

A scarcity of gold and high prices are pushing Indians to look to silver or diamond jewellery as alternative gifts this festive season, adding to the gloom in the gold trade after government measures to restrict imports.

Indians are the biggest buyers of gold in the world and many believe that buying and giving it on holy days brings good fortune. Friday marks Dhanteras, a huge festival associated with Lakshmi, the goddess of wealth, and another festival, Diwali, falls on Sunday.

“So far, we have sold just two gold rings today. It’s a far cry from what it was during Dhanteras last year,” said executive Sanjay Kumar at Chawla Jewellers in New Delhi. Saleswomen in bright traditional sarees sat idle.

Outside the shop, a big banner trumpets a 1,000 rupee ($16) discount on gold market prices and a discount of up to 50 percent on diamond jewellery.

“People are suffering from cost inflation, they don’t have liquid cash. We expect sales of about 25,000 rupees today, about half of what we made last Dhanteras,” said TM Bhandari, selling jewellery at Mohan Silver Shoppe in New Delhi.

Last year over this festival period around 60 to 70 tonnes of gold was sold, roughly the amount imported in an average month, according to Bachhraj Bamalwa, a director at the All India Gems and Jewellery Trade Federation.

Read the full story by Siddesh Mayenkar and Krishna N Das here.

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