India's Intrinsic Love of Gold

So what is it that keeps Indians crazy for gold?

There are several reasons why Indians consume so much gold. One of the main reasons can be generally attributed to their culture. In India, gold represents the goddess of fortune, Laksmi Devi who is a worshippable demi-godess. This is one of the reasons why ladies never place gold jewelry on their feet or anywhere below the waste. By gifting gold, one invites fortune into their own life as well as to the receiver's life. Gold has been very much part of the tradition and immense history of Vedic ceremonies.

In the Vedas, the ancient scriptures of India, elaborate rituals have been described in which Kings and the wealthy warrior class known as the Ksatriyas, gifted vast amounts of gold to the Brahmanas, the priest class of society. These Brahmanas would in turn give blessings and invoke good fortune to the giver of gold as well as to the society.


For this reason, gold consumption tends to increase during religious festivals or weddings and makes up 60% of the gold demands in India. These festivals or weddings don't take place whimsically, but in congruence with India's climatic changes. Beginning with Deepavali—or the light festival in November and ending in March with Holi—the color festival, this period makes up the harvesting season. The wedding season, taking place from October to May is another high time for gold. Weddings are the time for overwhelming displays of wealth and the invocation of good fortune, which explains the exaggerated amounts of gold that are gifted to the uniting families, especially—the bride. 

It is interesting to note that weddings take place during this period because there are no rainy months. During the rainy season, rituals and offerings cannot be offered to the gods because they are resting and consequently, cannot bestow their blessings.

On a more practical level, Indians know that gold is a protector of wealth and therefore, the real currency or indicator of wealth. Every family man knows that money comes and goes quickly, but converting assets such as property, money, or houses into gold, the future is secure. Security, on that account, is another one of the main reasons that Indians are currently investing in gold.

The current trends of gold consumption are nothing new, but simply an inherent investment habit that has grown large due to the increasing population of those making higher incomes. And yes, in spite of the fact that their buying power has caused fluxes in the world market, they stand firm and ready for more.

So, we have plenty of information about India's relationship with gold, both spiritual, traditional, and financially, but, where do we go if we want to buy gold, the legal way? That's a good question.

Read more next week to find out where in the world, is the best place to buy gold.




Works Cited:

www.goldnews.bullionvault.com

www.economictimes.indiatimes.com


*The photos included in this article are a courtesy of google. Thank you!

Indian Gold Trade

Having explored the silver market last week, Lavaculture has taken a plunge for gold. Although India is a land rich in many resources, it is unfortunately barren when it comes to gold. For centuries, India has had a history of gold smuggling that dates back to the 1830's.


Because of  its' low domestic gold production, which currently averages about 2 metric tons annually, India turned to foreign countries for gold, whether legally, or illegally due to the 1947 importation ban. This means that despite restrictions, India's gold consumption increased throughout the century, although sometimes taking dips during World War 2. As rates of illegal gold import increased, in 1992 the ban was lifted. Although this has not stopped the still existing illegal gold smuggling, it simply caused gold consumption rates to surge.



To this day, India is the number one gold market on the planet, and whether India gets its gold through official, or unofficial trade routes, the last few decades have demonstrated an even further rise in demands. In 2010 India averaged 700 metric tones and an expected 800 tons for 2011. Chief executive of National Spot Exchange Ltd., the country's largest exchange for the gold trade say that despite the increasingly high prices for gold this year, the demand continues. India Bloomberg experts say, "price is no longer an issue." The combined Indian household is known to have 15,000 metric tonnes of gold. It is a curious thing that one culture will own so much gold. Read more to find out why.
 

Works Cited:


www.goldline.com 
www.businessweek.com
*The photos included in this article are a courtesy of google. Thank you!

The Street of Incomparable Pearl

(Click on the title link for the podcast.)

This week, Lavaculture visited Chandni Chowk's famous silver street, Dariba Kalan. Dariba Kalan translates to "street of incomparable pearl". During the Mughal period this street was the central jewelry market and was most famous for its precious gems. Today, Dariba Kalan is most popular for its silver jewelry. Lavaculture had the opportunity to interview one of the nearby shop owners who shared a little something about the silver industry. Here are some of the most important tips that Lavaculture learned about purchasing silver, as relayed by Mr. Shiv Kumar Mittal, owner of the jewelry store, Mittal Associates. Not only that, but in Mr. Mittal we have also found a reliable contact for future ventures.

The first thing we learned was that India
imports silver from different parts of the world. It was quite astonishing to discover that India's main suppliers of raw silver are the United States, Mexico, and China. It is then processed and refined in India, but at a much cheaper rates.  Lavaculture also learned about the cost of silver. Mr. Mittal began the conversation with a one kilogram piece of raw silver in his hand. It was beautiful, heavy, and pricey. The cost of this chunk of silver was over $1600 US, but of course, normally, one doesn't buy silver in kilograms.
 
The average consumer purchases silver in grams. If you enter any Indian jewelry store you usually choose your item, have it weighed on a scale, and then multiply that weight by the current silver rate. 72rs, or $1.60 is the current price per gram for the highest quality of silver available. One can of course find slightly cheaper rates.

But, how does one know if it is real silver? If the silver is pure? Mr. Mittal shared with us a few ways to understand this, although it can get quite complicated. The first two ways of understanding if silver is pure is by running several tests such as a volumetric test, or a gravity test. If you are interested in learning more about these processes you can click on the following site which explains the details more clearly:
www.sellgoldhq.com

If you are shopping for silver jewelry as a regular retail customer, there are a few simple ways to test if it is real silver. Firstly, if you are looking at raw silver, its' texture usually has streaks and pores and is very heavy. If you are not necessarily looking at raw silver,  you can tell if it is real, if it is substantially heavy, and compact. If it is too light and flimsy, it might not be real.
Another way to tell is by hearing how it rings when you hit it. If it has a clear high-pitched sound that lasts, it is real silver. Otherwise it can be an alloy of various metals or silver-plated metallic material.
We hope you have enjoyed our little adventure and a brief introduction into the world of silver. Join us next time for yet another adventure to a silver jewelry store.

Lavaculture's Indian Bazaar Series

For the past few weeks, Lavaculture has been exploring the Indian market place. Beginning with the layout of the market places in Delhi, Lavaculture has gained sufficient knowledge of, as well as developed a deep interest in, the goods that India has to offer. 

There is much more to learn, but step by step Lavaculture is becoming familiar with the shopping scene. Of all the market places available, a specific market known as Chandni Chowk has been selected for exploration.

 
Within this 300 year old market is a street solely dedicated to our first shopping list item of interest, jewelry. We invite you to read on and join us on this week's venture.

To follow our recent adventures, please click on the links below to download our previous podcasts.


Podcast 1: Layout of the Indian Market Place 
Podcast 2: Chandni Chowk Market Place, New Delhi, India