No country in the world has a richer history with gold than India. From the Indus Valley Civilization—one of India’s first settlements—through the days of the Silk Road, then British Colonialism to today, gold has played an important role in Indian culture, faith and rituals.
One of gold’s strongest cultural bonds is with the holy Hindi month of Shraavan, which begins in late July and ends the third week of August each year. Shraavan pays tribute to Lord Shiva, who is responsible for change and the “destroying of the ego, the false identification with form,†according to Hinduism.
During the Varalakshmi Vratham festival, which falls on Friday, August 12, six prayer offerings are made to the goddess Lakshmi in order to bless worshipers with prosperity and wealth. The Varalakshmi Vratham, the festival of offering prayers to the symbol of prosperity and wealth, is said to be incomplete without a touch of gold, according to MineWeb.
Many thought consumers would be priced out from participating this year, but the World Gold Council (WGC) has teamed up with local jewelers in India to offer discounts and small installment plans to those seeking to include gold in their “puja.â€
“Every Indian family considers gold to be synonymous with wealth and prosperity,†Sonamull Chandrasekar, an Indian bullion retailer told MineWeb. “The Goddess is the giver of prosperity and wealth. With wealth synonymous with gold and despite it being the costliest of all metals, people make it a point to purchase at least a gram of gold and offer it to the Goddess during the fast.â€
This isn’t the first program the WGC has initiated to open more of the Asian market to gold. In February, the WGC and the Industrial and Commercial Bank of China (ICBC) launched the “Only Gold Gift Bar†program which offers gold bars weighing 10, 20, 50, 100 and 1,000 grams. Gold sales reached 1.8 tons in the program’s first few weeks, signaling the pent-up demand for gold in China.
India’s cultural connection to gold is one of the main drivers of the Love Trade. U.S. Global consultant and longtime friend Jayant Bhandari explained this connection when he and his mother Shanta sat down with Jeff Clark from Casey Research earlier this year.
Shanta said, “Indians feel deep in their hearts that gold is the best way to preserve and invest wealth.†This connection is especially important to women, who “consider gold to be their biggest security. Indian women have started working in the last decade, but the young working women are still passionate about gold,†Shanta says.
Last week I was speaking with Jason Toussaint, managing director for the WGC in the U.S., in preparation for our upcoming special webcast “A Case for Investing in Gold†on September 6. Putting the enormity of the Indian gold market into perspective, Jason highlighted that rural housewives in India hold roughly twice the amount of gold that the U.S. has stored in Fort Knox—estimated to be some 16,000 tons.
This is a large reason why gold remains a demand driven story. While much of the discussion on gold in the U.S. is focused on where the price will be the next hour, next day and next week, many people fail to recognize the long-term cultural connection that drives gold demand.
This is just one of the many interesting topics Jason and I will tackle during the special webcast on September 6. We’ll also discuss the role central banks could play after the Basel III accord is ratified, Eastern vs. Western views on gold and the possible relevance (or irrelevance) of the U.S. dollar as global reserve currency two decades from now.
Want to see more about civilization’s love affair with gold? Check out our interactive timeline tracking Gold Through the Ages.
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