Old gold: India's wedding bling love

Photo / Wanganui Chronicle.

From the jewel-encrusted tikka adorning the bride's forehead, to her chandelier-like earrings, ornate nose ring and the bangles on her arms, to the rings on her hennaed fingers and toes, a traditional Indian wedding involves some serious "bling".

Looking like a princess for the day is big business in India, primarily because of the vast amounts of jewellery bought by party-goers.

Indeed, commodity analysts have blamed spikes in the price of gold during September on preparations for the six-month marriage season, which starts in October.

The taste for gold is universal. Last week, spot gold touched US$1343.90 ($1761.40) an ounce - an all-time high - with bulls forecasting it could top US$1500 by the end of the year.

Gold has always been seen as a safe haven for investors at times of economic uncertainty. After the dotcom bust and the financial crisis that broke in 2007, its price has rocketed. But gold's bull run goes back further and, since 1999, the price has risen more than 430 per cent.

In 2009, India accounted for a quarter of all gold used in jewellery products and it is the world's biggest jewellery market, ahead of China, the US or the Middle East. Gold has been a standard medium of exchange for Indians over the centuries and almost the only means of saving in rural areas, which account for 70 per cent of the population.

Indian bullion trader Metier Capital Management says gold has huge religious significance, which also contributes to demand.

In Hindu mythology, gold is the essence from which the universe was created and Manu, the ancient lawgiver, decreed that golden ornaments should be worn for specific ceremonies and occasions.

The Hindu calendar even includes auspicious days on which to buy gold during these festivals, and other periods that counsel against it.

Custom demands that gold be bought for special occasions such as weddings, births and birthdays, as well as for religious festivals, particularly for Diwali, which is celebrated by Jains and Sikhs as well as Hindus.

But the biggest demand for gold comes from the ingrained custom of giving gold at weddings.

Soon after children are born, families start saving for the stridhan, the gifts given to the bride which become her exclusive property, to act as insurance against hard times, or the dowry that is given to the family of the groom.

It is estimated that gold and jewellery make up to 50 per cent of Indian marriage expenses.

India's influence over the gold bullion market is well established, says Natalie Dempster, the head of investment research at the World Gold Council. She says jewellery accounts for nearly 70 per cent of all demand for gold and that India buys 25 per cent of global output.

10 nuggets:

1 Gold is so rare that the world pours more steel in an hour than it has poured gold since the start of recorded history.

2 The amount of gold left underground could be running out. At the end of 2005, producers calculated their reserves at 22,000 tonnes.

3 One tonne of gold, in a cube, would have sides 37.27cm long.

4 The largest nugget found was the Welcome Stranger in Australia, in 1869. Measuring 25x63cm, it yielded 70kg of pure gold.

5 A standard gold bar is called a London Good Delivery Bar, which weighs 400 troy ounces, or 12.25kg.

6 Central banks hold about 12 per cent of their reserves in gold.

7 The Olympic gold medals awarded in 1912 were made entirely from gold. Now the medals are covered in just 6g of gold.

8 Every year, about 70 tonnes of gold are used for dental work.

9 About two-thirds of annual gold supply comes from mining, with 20 per cent coming from scrap.

10 The US has the biggest hoard of gold, followed by Germany and the International Monetary Fund.

- Observer