Dhanteras: Why India's Diwali gold rush is different this year - BBC

Gold Prices Soar Ahead of Diwali Festival in India

As the Hindu festival of Diwali approaches, Indians are once again turning to gold as a popular investment option. This trend is expected to continue, with many people opting to buy gold coins, bars, and jewellery ahead of the festive season.

The Rise of Gold as an Investment Option

In recent years, India has seen a significant increase in gold demand, particularly among investors. The country's growing middle class and increasing awareness about the benefits of investing in gold have contributed to this trend.

Gold is considered a safe-haven asset during times of economic uncertainty or market volatility. It is also perceived as a hedge against inflation, currency fluctuations, and other economic risks. As such, many Indians are turning to gold as a way to diversify their investment portfolios and protect their wealth.

The Festive Season Boost

Diwali, which falls on the new moon day between mid-October and mid-November, is one of the most significant festivals in India. It marks the triumph of light over darkness and good over evil, and is celebrated with great fervour across the country.

As the festival approaches, gold prices are expected to rise, driven by increased demand from investors. In recent years, Diwali has seen a surge in gold sales, with many jewellers and gold traders reporting significant increases in business.

Why Gold Remains a Popular Choice

So why do Indians continue to prefer gold as an investment option? There are several reasons for this preference:

• Liquidity: Gold is a highly liquid asset, making it easy to buy and sell.
• Portability: Gold jewellery can be easily carried or stored, making it a convenient investment option.
• Diversification: Gold provides a diversification benefit when added to other investments, such as stocks or bonds.
• Store of value: Gold has traditionally been seen as a store of value, holding its purchasing power over time.

Market Trends and Outlook

The gold market is expected to remain bullish in the coming months, driven by increased demand from India and other emerging markets. The Indian government's decision to allow gold imports through the special exchange mechanism (SEM) for exporters has also boosted investor confidence.

However, some analysts note that the gold price may face some headwinds due to rising interest rates in the US and Europe. Additionally, the global economic outlook is uncertain, with trade tensions and other geopolitical issues potentially affecting demand for gold.

Jewellers and Gold Traders Prepare for Diwali Rush

As the festival approaches, jewellers and gold traders are gearing up for a busy period. Many have already started stocking up on gold jewellery and coins to meet anticipated demand.

"Diwali is one of our busiest periods, and we expect this year to be no exception," said Ramesh Kumar, owner of a leading gold retailer in Delhi's Lajpat Nagar neighbourhood. "We are stocking up on gold coins and bars to cater to the expected surge in demand."

Investors Take Note

For investors looking to get in on the gold trend, now may be a good time to consider purchasing gold coins or jewellery. However, it is essential to do thorough research and consult with experts before making any investment decisions.

As one expert noted, "Gold can be a valuable addition to an investment portfolio, but it's crucial to understand its risks and rewards. Investors should carefully weigh their options and make informed decisions based on their individual financial goals and circumstances."

Conclusion

The trend of Indians choosing gold as an investment option is expected to continue ahead of Diwali this year. With many people opting to buy gold coins, bars, and jewellery, the market is likely to remain bullish in the coming months.

While there are some potential headwinds facing the gold market, such as rising interest rates, investors may still find gold to be a valuable addition to their portfolios. As always, it's essential to approach any investment decision with caution and thoroughly research the options available.

In the meantime, jewellers and gold traders in India are gearing up for a busy period, ready to meet the anticipated surge in demand from eager buyers.