Wed­ding crash­ers

The Star Malaysia - Star2 - - LIVING - By NEETA LAL

Gold prices take sheen off In­dian fes­tiv­i­ties.

THE loom­ing Big Fat In­dian Wed­ding sea­son may lose much of its sheen thanks to gold prices touch­ing an as­tro­nom­i­cal US$540 (RM1,620) per 10g last month in In­dia, up by nearly dou­ble as com­pared to 2009.

Gift­ing gold in mar­riages is a deeply en­trenched cus­tom in In­dian so­ci­ety, so much so that mid­dle-in­come fam­i­lies start sav­ing up soon af­ter their chil­dren are born – for dowry, in case a daugh­ter is born. Gold gifted to the bride is called strid­han and this is exclusively her prop­erty in her new house.

The cus­tom goes back to an­cient times when In­dian women were not independent and ed­u­cated which left them vul­ner­a­ble to so­ci­etal pres­sures in case of wid­ow­hood or drought due to poor har­vests.

Un­der such cir­cum­stances, gold pro­vided the women with fi­nan­cial suc­cor. Though the dowry sys­tem is now banned in In­dia, most par­ents in­sist that gold be given as gift to the bride. And hence the spi­ralling de­mand for jew­ellery de­spite stag­ger­ing prices. In­dian house­holds, ac­cord­ing to the World Gold Coun­cil, have the high­est col­lec­tion of gold in the world es­ti­mated at 18,000 tonnes.

The pre­cious metal, whose key driv­ers are in­vest­ment and jew­ellery, is widely seen as a safe haven in times of eco­nomic uncer­tainty and high in­fla­tion. In In­dia, gold is also his­tor­i­cally and cul­tur­ally tied to the con­cepts of wealth and pros­per­ity. IN­DIA – the world’s largest gold mar­ket – imports around 1,000 tonnes of the yel­low metal ev­ery year and ac­counts for about 20% of the global de­mand.

De­spite gold’s pro­hib­i­tive prices, ac­cord­ing to the World Gold Coun­cil (WGC), about 10 mil­lion mar­riages that take place in In­dia ev­ery year can still help main­tain the buoy­ancy of gold de­mand in the coun­try.

In­ter­est­ingly, ac­cord­ing to the WGC, de­mand for gold by the In­dian and Chi­nese grew 38% and 25% re­spec­tively in 2011, com­pared to the same pe­riod of 2010.

This growth is likely to con­tinue, due to in­creas­ing lev­els of eco­nomic pros­per­ity, high lev­els of in­fla­tion and forth­com­ing key gold pur­chas­ing fes­ti­vals.

“The strength of de­mand in In­dia and China, cou­pled with an over­all drop in re­cy­cling ac­tiv­ity this quar­ter, demon­strates that con­sumers have ad­justed to the cur­rent price environment,” said the re­port.

But now, with the gold jug­ger­naut vir­tu­ally un­stop­pable, buy­ing even a small piece of jew­ellery is throw­ing nup­tial bud­gets out of kil­ter. Brides and grooms are be­ing forced to buy less while some are even post­pon­ing their wed­dings till they can muster enough fi­nance (and courage) to buy gold or­na­ments.

For brides-to-be, jew­ellery shop­ping is prov­ing to be a damp­ener. “I can very well do with di­a­monds but it’s a mat­ter of fam­ily pres­tige, so we’ve pooled all our re­sources and bought some light jew­ellery for my wed­ding. My un­cle helped by giv­ing us a loan of US$5,000 (RM15,000),” says 28-year-old Arti

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