Ten years ago, consumer demand for gold bullion and jewellery in India accounted for about a quarter of world demand. Today, however, the Indian gold market is not the same as before.
Over the past ten years, the consumption of gold products declined by about 24 percent. Even in the eve of the Sunday of the festival Diwali, when purchasing decorations traditionally reach their peak, imports in September fell to its lowest level in three years.
Partly this is due to the increase in the price of bullion up to 38200 rupees (or 539,24 U.S. dollars) per 10 grams and the deterioration of the economic situation in India.
However, there are other, long-term domestic factors, due to demographic changes. About two thirds of the country's gold is purchased by the villagers who, unlike urban Indians prefer to buy gold jewelry as a means of accumulation.
Therefore, demographic changes are a big risk for the entire gold market. The rural population of the country decreases due to declining birth rates and migration to the cities, which shifts the focus of spending on consumption.
"Urban Indian youth are increasingly tempted not gold, and other luxury items and smartphones," the report says industry group the World Gold Council.
as an alternative of gold jewelry for anyone who wants to save up for a rainy day, today is Bank savings. According to the world Bank, the proportion of rural residents that have Bank accounts has increased to 79 percent in 2017 compared with 33 per cent in 2011.
of Course, the role of India in the global gold market will not disappear overnight. According to the world gold Council, about half of the demand for gold jewelry in India comes at the end of October, when is the peak of wedding season.
However, the changes in consumer demand should be a warning for investors, the appeal of gold which has long helped to decrease the sharp fluctuations of prices for the yellow metal.
