In times of financial uncertainty, the precious metal has always been considered a safe bet. This is especially true in India, where half of the world’s gold can be found.
People in India trust gold more than equities - for fashion, security and resale value
The jeweller's shop in Old Delhi has stood for centuries with gems, gold necklaces, intricate pendants, rings and brooches on display. During a lean time, there are about 15 customers. But when it gets busy, up to 80 customers can be served at a time.
Krishna Mallick has been in the gold trade for decades. People in India "trust gold more than equities. Firstly the fashion, secondly the security of the gold and thirdly because it is cashable at any time," he said.
In India, gold often called "stridhan" is an important part of marriage tradition
One of his customers agreed, saying that it's a safety net and can be sold when times are bad. She said, women in particular feel that they have something real, "something solid when they have gold in their hands."
Gold or "stridhan" - an important part of marriage
In India’s rural regions, gold, often called "stridhan," is an important part of marriage tradition. "Stri is lady and dhan is gold or money. She’s entitled to take it back in case there’s a divorce," explained Mallick.
Stridhan is enshrined in Indian law. It was introduced to protect married women, who often do not earn any money. Parents in India often buy gold when it is affordable and save it to be given to their daughters during marriage. Another customer who had come to buy gold said he bought "about 800 euros worth of gold. My daughter will get it when she marries."
In his family, all women should "have at least 40 grams of gold."
Gold is the most imported raw material in India after oil, with over 300 tons coming in 2010
40 grams of gold - sold for about 1,300 euros these days -might not guarantee a secure future, but it will ensure that a woman does not end up with nothing.
The "stridhan" has nothing to do with dowry, which goes to the groom’s family or to the married couple. Ashwani Mahajan, a renowned economist said it is considered more as a kind of investment for the future.
Investment for future
"In the Western world, people go for homes," said Mahajan. "But in India, a large part of the population invest in gold. If you look at the purchase of gold, more than half the gold is purchased by Indians," he pointed out.
Jewelry is an important part of festivity and shopping in India
Gold is in every home. It is also the most imported raw material in India after oil, with over 300 tons coming in 2010 – some 3.5 percent more than the previous year. The precious metal was also one of the the most common forms of exchange or trade in India in ancient times. "The Western world before the industrial revolution did not have anything to sell to us, so the Indian traders used to ask for gold," explained Mahajan.
Even as India modernizes and families invest more in their daughters’ education than in their "stridhan," gold continues to be cherished. The price of this precious metal continues to rise, although this means that for some it has already become too expensive.
Author: Uwe Lueb (act)
Editor: Thomas Baerthlein