Indian gold demand is sharply higher right now, due to Hindu New Year festivals and the upcoming spring wedding season. A stronger rupee, which has gained 4.8% against the dollar so far this year, has helped moderate gold prices and stoke demand, and a good monsoon season last year has given rural Indians the money to buy.
Hindu Spring Gold Demand
Several very auspicious Hindu spring festivals occur from late March through mid-April, with New Year's celebrations and festivals devoted to the gods Ganesh and Rama, and the goddess Lakshmi.
March 29th was the festival date of Gudi Padwa this year (some communities celebrated on the 28th). Also known as Ugadi, this festival marks the Luni-Solar New Year in Maharashtra, Andhra Pradesh, and Karnataka, and is considered especially auspicious.
Chaitra Navratri Ashtami on April 4th falls on a Tuesday, which lends it even greater auspiciousness. The Hindu Solar New Year will occur on April 13th. On April 28th is Akshaya Tritiya, one of the four most holy days in the Hindu calendar. It is believed that any boons received on this day will never diminished, making it an extremely popular day to buy gold.
Of course, we can't forget the spring wedding season, which is in full swing.
Those Wedding Bells Are Cash Registers Ringing...
Indian gold imports shot up to 96.4 metric tonnes in February, as jewelers brought in extra raw material in time to be fashioned into festival and wedding gifts before the big spring rush. This was a 175% increase from February 2016 gold import numbers.
Bloomberg quotes Chairman Mehul Choksi of giant jewelry store chain Gitanjali Gems Ltd as saying “We expect some heavy buying in April as a large number of weddings are expected to take place. The [Indian] wedding season runs from April to July, so we are expecting some recovery in demand.”
But The Clock Is Ticking
According to various (sources), there are a total of 54 auspicious wedding days for 2017. Only 6 (or 7) of those dates occur between the end of the unlucky Chaturmas season (July 4 - October 31) and December 31st. This means nearly 90% (48 or 47 days) of auspicious wedding days this year are in the Spring. Of those days, 18 (or 20) have already passed.
On average, there are one crore (10 million) weddings in India each year. As of April 1st, there only 29 (or 28) auspicious dates remaining for the 2017 Hindu Spring Wedding Season. Taking the first three months of the year as a measure, we could see Indian gold demand double by July.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.