01-Nov (Reuters) — A scarcity of gold and high prices are pushing Indians to look to silver or diamond jewellery as alternative gifts this festive season, adding to the gloom in the gold trade after government measures to restrict imports.
Indians are the biggest buyers of gold in the world and many believe that buying and giving it on holy days brings good fortune. Friday marks Dhanteras, a huge festival associated with Lakshmi, the goddess of wealth, and another festival, Diwali, falls on Sunday.
“So far, we have sold just two gold rings today. It’s a far cry from what it was during Dhanteras last year,” said executive Sanjay Kumar at Chawla Jewellers in New Delhi. Saleswomen in bright traditional sarees sat idle.
…Given high inflation and low real interest rates, many Indians see gold as an investment. If demand is being displaced anywhere this year, it is to silver and diamonds, which hold their value in the same way.
Imports of silver – which costs just 500 rupees per 10 grams – are likely to hit a record this year after reaching 4,073 tonnes from January to August, more than double the 1,921 tonnes in the whole of 2012.
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PG View: Perhaps not surprisingly, silver is holding steady today, while gold has come under additional pressure.
