Mad rush to buy gold on Dhanteras in Gujarat

By ENN, Ahmedabad: Right from morning on Dhanteras Day (October 15), Ahmedabad, the biggest city in India's Gujarat state, witnessed long queues in front of renowned jewellery shops. The reason is people have said goodbye to recession and they have come out in hordes to buy gold on the occasion of Dhanteras, an auspicious time to make new purchases for Hindus in India.

With Diwali just a day away, jewellers across the country are doing their best to woo the customers with various offers and schemes. Almost all the jewellers have stepped up their advertisement campaigns to make use of the occasions.

Gold scaled record heights in India this week with the prices crossing Rs 16,000 per 10 gm on Wednesday. And buyers have been watching the prices and keeping away from the market for some time. But, the auspicious occasion has lured them back to the gold market and they are buying gold like never before. On Pushya Nakshatra, another good day to buy gold for Hindus, Ahmedabad saw people buying over 300 kg of gold.

If you say now that a weak economy and high rupee prices for gold in India, the world's largest importer of bullion, had pushed demand down 83 per cent from a year earlier to 17.7m tonnes in the January-March quarter, nobody will believe it. In the next quarter demand was down 38 per cent year on year.

India's main gold-buying season usually kicks off in October with Dussehra, a festival celebrating the triumph of good over evil, and Diwali, when Hindus pray to the goddess Lakshmi for prosperity and buy gold for family members. People also buy during the wedding season, mainly in November and December.

To try to spread buying more evenly through the year, the World Gold Council strategy is to encourage gold buying during more of India's ancient religious festivals.

These include Baisakhi, the Punjabi harvest festival in April; Gudi Padwa, another harvest festival in Maharashtra state; and even Pitru Paksha, a period when Hindus honour their ancestors.

The World Gold Council is trying new methods to win the Indian customer. There are gold savings schemes at post offices, micro-finance schemes to enable peasant farmers to save gold in small increments and retail marketing schemes such as the Great Indian Gold Rush.

However, there are reports that this Diwali some people in Mumbai are putting off their plans to buy gold and instead waiting for the prices to come down.

But, Gujaratis are going great guns with gold purchases. And if you consider the business acumen of Gujaratis, they hardly go wrong. So, it seems Gujaratis have realized that the only way gold prices can move now is up!