You’ve probably seen it since when you were a child attending weddings, and had no idea of the impact it was having on the demand and supply of gold, globally. Brides adorned with gold, hosts and guests alike wearing their gold jewellery to establish their place in society. Princely gifts of gold bars and coins being given to the happy couple by guests and well-wishers. On an average, Indian weddings see at least 2 to 3 kilos of gold according to a recent study, which goes on to say that the richer households see several more kilos on display. It’s not hard to believe, given our affinity for the precious metal, but the numbers in the macro sense are quite impressive.
India imports around 33% of the entire world’s gold production. After all, ten million weddings a year, 99% of which hold gold as the highest possible indicator of social standing, would create a demand far higher than what can be met with India’s own gold production. Even leaving aside the gold that’s bought as investments or commodities for trading, the amount of gold bought for weddings is scarily high.
Here’s Why Gold is Important in an Indian Wedding
The need for gold at weddings is a cultural norm and is deeply rooted in our culture. It’s a widely held belief that the more gold that bride wears, the higher the chances are for a successful and financially secure married life. There’s also the fact when a girl gets married and moves in with her husband and in-laws, she doesn’t take much in the way of personal wealth. The gold she wears on her wedding day is all hers, it’s what she takes with her – it’s what gives her power and financial security apart from that which her husband can provide. It’s a reserve for dire straits and financially strenuous times, and also a sign that she is to be taken seriously and treated with respect. The bride adorned with gold on her wedding has a subtle financial strength, and an unspoken power – she has assets of her own that are separate from her husband. This tradition and culture has been passed down from many generations, when women didn’t have the opportunities and freedoms that they do today, when they couldn’t go out into the world and earn for themselves. It’s a tradition of the girl’s family providing her the financial security for whatever may come to pass in her new life. It’s for these reasons that gold is such an integral, central part of Indian weddings.
With the increasing number of educated, capable and profitably employed Indians, there is a larger demand for gold from a larger number of people who can now afford it. The middle and richer classes of society greatly outnumber the poor, who also spend their savings on gold. The fluctuations in the gold rate don’t affect the buying power or desire of Indians to own gold, as weddings are planned years in advance, and the process of saving for gold wedding jewellery starts very early. In most parts of the country, girls are given gold on occasions like birthdays and as rewards for achievements, in anticipation of their wedding day. Indians will buy gold whatever the price.
It’s not just India, though
While India’s wedding traditions aren’t the only thing that’s fuelling global gold demand, Turkey and Vietnam also have experienced a huge rise in the demand for gold.
Turkish wedding traditions too demand a lot of gold, with the typical bridal gift being a 22-carat gold set that includes at least a 60 gram necklace and pair of gold earrings. Turkish couples also buy gold wedding rings in addition to their solitaire engagement rings and assorted gold jewellery for the ceremony. It’s fascinating to think that cultural traditions have the power to influence global demand and supply for a precious metal commodity.
Vietnam is importing gold like never before, and has experienced an 18% increase in gold prices. According to the World Gold Council, Vietnam had imported more gold per capita than China or India last year. Vietnamese people also are of the belief that gold is a more stable investment and savings instrument than paper currency, which could crash or be doomed by recession.
There is only a limited amount of gold on the Earth, and simple calculations will tell you that it’s all going to be sold one day, and now is the ideal time to go out there and invest in some precious yellow metal before it’s all gone. The demand and price will go up exponentially once there is no more supply.