7 reasons why Indians love gold
According to the Hindu Calendar, Akshaya Tritiya is a very auspicious occasion for new beginnings. During this period, people enter into new business ventures, make travel plans and also celebrate weddings.
April 24, 2012 / 11:50 AM IST
Kotak Mahindra Bank
Significance of Gold: People buy gold for a variety of reasons such as for its auspicious sentiment; as an investment (Gold continues to command long term value, a tag for being a safe haven); hedge against inflation; asset allocation, etc. Gold also carries a high perceived value and a high emotional quotient. It reinforces closeness of relationships. Gold coins in smaller denominations are also considered apt for Corporate gifting and rewards for contests or for commemorative giveaways.
The Indian Consumer’s sentiment towards Gold: Many people think that Indians are gold crazy. Though this statement cannot be completely negative, the truth is that Gold has always had a special significance for all ages. The old adage - all that glitters is not gold, also in a way underlines the importance accorded to Gold. Gold lends itself as a commemorative medium to various engagements like golden anniversaries, golden jubilee, gold medals, gold credit card etc. In India people buy gold anytime and not only during special occasions like weddings, festivals or special events. Gold is also offered to Indian deities. The Indian Hindu calendar even has auspicious days to buy gold like Dhanteras and Dassera. Gold is also bought on festivals like Onam, Pongal and Durga Puja.
Though gold has several applications or uses the main reasons why Indians take to gold are:
- Gold is considered an equivalent for liquid cash: Gold is highly liquid and portable as a Security or Asset. It can be converted to cash anytime when an emergency arises and is considered a friend in need.
- Gold is considered as a Status Symbol: Especially in India gold symbolizes wealth. In Indian weddings the Gold brought by the bride shows her family's status and wealth. It is believed that a bride wearing 24k gold on their wedding to bring luck and happiness throughout the married life.
- Gold is a very good investment: Gold is an asset which has consistently increased in value and thereby considered as a safe and secure investment. In the last five years Gold has delivered over 20% YOY return. It is considered an effective diversifier which helps to reduce portfolio risk.
- Gold is considered as gift item: It's precious and worthy across all cultures and times. The gold jewelry is given as gifts during weddings, festivals and other special occasions.
- Gold has great religious significance: Gold is the symbol of the Hindu Goddess Lakshmi and considered highly auspicious. Gold is brought or presented on festivals like Dhanteras and Akshaya Tritiya. Toe rings are never made of gold as it represents the goddess of wealth and should not be soiled by touching a human's feet.
- Great Ornamental Value: Who can resist gold ornaments? Women of every age and time have always loved wearing gold ornaments. Moreover, Gold ornaments are never out of fashion. It also may be remembered that wedding rings are also traditionally made of gold to mark a long lasting relationship.
- Great value as Heirloom: Gold jewelry is something which can be passed down from one generation to the other as ancestral property.This is why people say Gold is forever!
The importance of Akshaya Tritya: According to the Hindu Calendar, Akshaya Tritiya is a very auspicious occasion for new beginnings. During this period, people enter into new business ventures, make travel plans and also celebrate weddings. Buying gold is also a popular activity, as it is the symbol of wealth and prosperity. Gold bars, coins and gold jewellery bought and worn on Akshaya Tritiya signify never diminishing good fortune. During the period both banks and jewellers promote gold sales aggressively, offering the best prices and discounts. Customer demand during Akshaya Tritiya surges due to a belief that gold purchases go a long way in securing the future.
Disclaimer: The views expressed in the article are personal and do not reflect the views of Kotak Mahindra Bank Ltd.