Indians Recycle Jewelry as Gold Prices Surge In
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Posted On: 01/05/2024 1:28:10 AM
Indians Recycle Jewelry as Gold Prices Surge
Indians are reportedly exchanging their gold jewelry for new pieces despite rising gold prices amid a wedding season-induced demand boom. India Bullion and Jewelers Association national secretary Surendra Mehta says that an increasing number of Indians are choosing to reuse their gold and predicts that high gold prices will continue to pressure imports for the next couple of months.
Mehta notes that while many Indian consumers are buying gold to meet their wedding-related needs, they tend to stay away from the gold market once these needs are met.
Gold prices have spiked worldwide in recent weeks, thanks to a combination of factors that pushed the precious metal’s prices to historic highs. The armed conflict in Gaza caused gold prices to rise as investors sought to protect their funds from the fallout of a potential war in the oil-producing region. In addition, speculation that the U.S. Federal Reserve would tighten its monetary policy coupled with lower U.S. Treasury Yields and a weaker dollar offered even more support to gold and caused its prices to rise by more than 10% since early October.
With the Indian rupee weakening against the dollar, purchasing gold is becoming increasingly expensive for Indians. India is the second-largest consumer of gold jewelry after China. The World Gold Council notes that the Asian nation imported 611 tons of gold jewelry in 2021. Bridal jewelry accounted for 50% to 55% of the market share while daily-wear jewelry made up 40% to 45% of the market. Interestingly, the World Gold Council report found that rural Indians were the largest gold jewelry consumers at 55% to 58% of the market share while middle-class Indians were the primary consumers of gold.
The report noted that although gold jewelry demand is often faced with challenges such as changing consumer demographics, demand in India has remained resilient. That said, recent data shows that except for purchasing jewelry for the wedding season, Indians are mostly staying away from other gold-related assets. Indian weddings are often massive several-day events that involve dozens of guests and copious amounts of jewelry.
As Indian families tend to spend heavily, especially with the November to February wedding season in full swing, the country currently holds significant amounts of the precious metal. Indian temples and households collectively hold around 25,000 tons of gold, and the country imports 800–900 tons of gold annually with most of it going to the jewelry industry.
World Gold Council managing director Somasundaram PR says that economic and income growth as well as wealth distribution and the rate of urbanization will drive gold jewelry demand in India over the long-term.
For entities such as GEMXX Corp. (OTC: GEMZ) that participate in the entire jewelry-making supply chain from precious metal mining right up to making the final jewelry pieces, measures can be taken to keep costs minimal and offer products at more affordable rates. These efforts give such companies an advantage when gold prices soar in the way that they have done recently.
NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Indians are reportedly exchanging their gold jewelry for new pieces despite rising gold prices amid a wedding season-induced demand boom. India Bullion and Jewelers Association national secretary Surendra Mehta says that an increasing number of Indians are choosing to reuse their gold and predicts that high gold prices will continue to pressure imports for the next couple of months.
Mehta notes that while many Indian consumers are buying gold to meet their wedding-related needs, they tend to stay away from the gold market once these needs are met.
Gold prices have spiked worldwide in recent weeks, thanks to a combination of factors that pushed the precious metal’s prices to historic highs. The armed conflict in Gaza caused gold prices to rise as investors sought to protect their funds from the fallout of a potential war in the oil-producing region. In addition, speculation that the U.S. Federal Reserve would tighten its monetary policy coupled with lower U.S. Treasury Yields and a weaker dollar offered even more support to gold and caused its prices to rise by more than 10% since early October.
With the Indian rupee weakening against the dollar, purchasing gold is becoming increasingly expensive for Indians. India is the second-largest consumer of gold jewelry after China. The World Gold Council notes that the Asian nation imported 611 tons of gold jewelry in 2021. Bridal jewelry accounted for 50% to 55% of the market share while daily-wear jewelry made up 40% to 45% of the market. Interestingly, the World Gold Council report found that rural Indians were the largest gold jewelry consumers at 55% to 58% of the market share while middle-class Indians were the primary consumers of gold.
The report noted that although gold jewelry demand is often faced with challenges such as changing consumer demographics, demand in India has remained resilient. That said, recent data shows that except for purchasing jewelry for the wedding season, Indians are mostly staying away from other gold-related assets. Indian weddings are often massive several-day events that involve dozens of guests and copious amounts of jewelry.
As Indian families tend to spend heavily, especially with the November to February wedding season in full swing, the country currently holds significant amounts of the precious metal. Indian temples and households collectively hold around 25,000 tons of gold, and the country imports 800–900 tons of gold annually with most of it going to the jewelry industry.
World Gold Council managing director Somasundaram PR says that economic and income growth as well as wealth distribution and the rate of urbanization will drive gold jewelry demand in India over the long-term.
For entities such as GEMXX Corp. (OTC: GEMZ) that participate in the entire jewelry-making supply chain from precious metal mining right up to making the final jewelry pieces, measures can be taken to keep costs minimal and offer products at more affordable rates. These efforts give such companies an advantage when gold prices soar in the way that they have done recently.
NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
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