Gold has been valued and loved for many civilizations. It has different meaning in different cultures and is still the best way to secure riches in turbulent times. The time has come for the gold rush to begin. It’s Indian wedding season time once again and gold is set to be bullish. The Indian wedding season runs from September through October to December. Indian weddings are a spectacle of gold. There is high value placed on gold and it plays a significant part in the ceremony and during the marriage period.
Elaborate gold-laden weddings date back centuries and they have been one of the main gold market drivers. Traditional Indian weddings involve a bride draped in the purest gold, preferably 22 karat gold. Gold isn’t just ceremonial, but it is a symbol of the deity that brings wealth, prosperity and joy in a new marriage. A marriage is basically considered to be blessed if the bride is able to carry her of own gold into her new home. On average 10 million people get married in India, but Indians are scattered all over the world so those who still follow traditionally wherever they are also buy gold around the same time. India accounts for a third of the global gold demand and half of that gold goes into the wedding jewellery making industry.
According Michael CEO from Brisbane Gold Company, over the last 15 years, a gold trader who buys gold around the 15 September and selling by the 8 October would profit 80% of the time. Of course, there might be other factors, but the biggest factor is this annual spending spree. It stands to reason that this spree will do something significant to gold market prices. In one year, India buys 514 tonnes of gold. Most of this goes into jewellery.
Gold is not only a financial asset, but a cultural and traditional material with emotional and historical significance. Gold is supposed to be fortuitous. The Hindu Goddess, Lakshmi is believed to give out good blessings to those who bring gold into their households.
In 2017, gold sales surged to 855 tons during the Indian wedding season. The question is, will a surge be experienced this year and will it be significant enough to rally the price of gold beyond current values? The answer to that question is: “pretty likely”. The biggest market for Indian gold jewellery happens to be Dubai. Most gold traders in the Emirates place their gold orders for delivery between 1st September and 20 September in anticipation of a jump in sales. This strategy has been successfully 75% percent of the time in the last decade. Even through the financial crisis of 2008-2009, there was still profit to be made.
By all accounts the gold traders in Dubai are setting themselves up to make the best of this year’s Indian Wedding season. Maybe, just maybe gold will breach the $1,280 mark.