Gold may be a glittering investment opportunity on account of a sustained upward spiral in prices, but the meteoric ascent has brought tears to many families in Kerala, where gifting ornaments to brides for their marriage is a common practice.
With gold breaching the Rs 20,000-mark for a sovereign recently, market figures show there has been no let-up in retail buying, as gold is an integral part of marriage, cutting across caste and community divides in Kerala.
According to market leaders, an average of 60-70 tonnes of gold is sold annually in the state, contributing around Rs 200 crore (Rs 2 billion) to the state exchequer in tax.
"We see many touching scenes these days like parents of prospective brides breaking into tears at jewel shops finding their plans and calculations going awry," a source confirmed.
On the other hand, market statistics show that the soaring prices have made the metal a reliable investment option for the rich.
The steady march of gold price has raised investors' interests in the precious metal. The number of people seeing gold as a safe investment option is increasing.
The investors prefer coins, 24-carat biscuits and pure gold bars over ornaments.
Gold crossed the Rs 10,000 per kg mark in October, 2008, after which it has continued to gain ground, with its value almost doubling in three years.
"The demand for gold coins and bars is at an all-time high in the Kerala market.
"This shows the number of people considering gold as a better investment option has gone up.
Traders have come out with strategies to ensure that the increasing prices do not dent demand.
Major jewellers in the state have launched schemes like 'advance booking', which offer delivery of gold at a future date at the prevailing rate on the day of booking.
The recent developments in the US economy and problems in the euro zone are the major reasons for the spurt in gold prices.
Cases of parents becoming bankrupt and even being driven to suicide after running into an inextricable debt trap have also been reported.
"We fear the present gold price hike will add to the woes of the parents of girl children in the state,"is a cause of concern for all.
Follow us: www.facebook.com/karvywealth
Source: http://www.rediff.com/business/slide-show
With gold breaching the Rs 20,000-mark for a sovereign recently, market figures show there has been no let-up in retail buying, as gold is an integral part of marriage, cutting across caste and community divides in Kerala.
According to market leaders, an average of 60-70 tonnes of gold is sold annually in the state, contributing around Rs 200 crore (Rs 2 billion) to the state exchequer in tax.
"We see many touching scenes these days like parents of prospective brides breaking into tears at jewel shops finding their plans and calculations going awry," a source confirmed.
On the other hand, market statistics show that the soaring prices have made the metal a reliable investment option for the rich.
The steady march of gold price has raised investors' interests in the precious metal. The number of people seeing gold as a safe investment option is increasing.
The investors prefer coins, 24-carat biscuits and pure gold bars over ornaments.
Gold crossed the Rs 10,000 per kg mark in October, 2008, after which it has continued to gain ground, with its value almost doubling in three years.
"The demand for gold coins and bars is at an all-time high in the Kerala market.
"This shows the number of people considering gold as a better investment option has gone up.
Traders have come out with strategies to ensure that the increasing prices do not dent demand.
Major jewellers in the state have launched schemes like 'advance booking', which offer delivery of gold at a future date at the prevailing rate on the day of booking.
The recent developments in the US economy and problems in the euro zone are the major reasons for the spurt in gold prices.
Cases of parents becoming bankrupt and even being driven to suicide after running into an inextricable debt trap have also been reported.
"We fear the present gold price hike will add to the woes of the parents of girl children in the state,"is a cause of concern for all.
Follow us: www.facebook.com/karvywealth
Source: http://www.rediff.com/business/slide-show
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