Shaik Ameen, owner of the Gold Palace jewellery shop, complained about slow business as soaring gold prices have led Indian families to cut back on pre-wedding gold purchases.

Ameen said that before gold prices hit new records, of the 50 or so customers who came through his door each day, about half could be counted on to make a sale. That proportion has now dropped to about a quarter. "People have stopped buying gold," Ameen said. "A person who could afford to buy about 100 or 200 grams of gold now buys only 50 to 60 grams."

Indian consumers’ love affair with gold is world-famous: the yellow metal is traditionally seen as a store of value for families and is associated with Lakshmi, the Hindu goddess of wealth and prosperity.

However, gold has risen 24% in rupee terms over the past 12 months, driven by conflicts in the Middle East and Ukraine and big bets by speculators. China has surpassed India as the world's largest gold importer.

Despite the yellow metal's huge cultural importance at Hindu festivals and weddings, demand for gold jewellery in India fell 6% last year, compared with a 10% increase in China, according to the World Gold Council.

Crisil, an Indian analytics firm owned by S&P Global, expects gold sales in India to "stagnate" by March 2025.

Titan, the jewellery and fashion unit of India's Tata Sons group, reported fourth-quarter profit of $95 million in May, missing analysts' expectations as high gold prices hit demand.

Surendra Mehta, national secretary of the Indian Bullion and Jewellers Association, said that while there was a "passion" for gold in India, the rising costs would have an impact on families planning upcoming weddings.

“They have two choices, either buy less gold or buy gold of lower purity,” he said. “I don’t see prices correcting in the short term.”

WedMeGood founder Mehak Sagar Shahani said old jewellery was being recycled into new pieces in response to the "crazy prices" of gold.

Vithika Agarwal, co-founder of upscale wedding planning company Divya Vithika Wedding Planners, said rising gold prices have not stopped wealthy people from buying gold.

“The high-end clientele is not affected too much, the show-off factor is very big,” she said.

Anil Karumbaya, sales associate at the flagship Bangalore store of the C. Krishniah Chetty Jewellery Group, noted that Bangalore, India’s Silicon Valley, is home to several billionaires and millionaires. “The upper class and middle class come here, and I don’t think they are affected, the prices are not prohibitive for them,” he said.

He added that many of the city's residents are wealthier than they appear. "People have a lot of money. You'll have people come in with very simple shoes and leave with a $12,000 bill."

The article is forwarded from: Jinshi Data