Diwali and Gold: Gold Price Trends to Watch Out For
The Hindu Festival of Light, otherwise known as Diwali, is the most important religious festival in the Hindu calendar. You could almost say it’s the Hindu Christmas in terms of the significance it holds.
An essential part of this festival is the practice of buying gold, often jewellery, as a gift for friends and loved ones. Investing in gold therefore, in the form of gold coins or gold bars, can be seen as a smart investment opportunity for those looking to take advantage of this annual rise in demand.
Why is gold so important to Diwali?
Gold is a very important part of the Hindu culture, both in Diwali and throughout the rest of the year. On a normal day, India is considered the world’s largest consumer of gold, and this phenomenon reaches new heights on the first day of Diwali, or ‘Dhanteras’, as it’s referred to.
Dhanteras is the single biggest day of gold purchase in the whole year. You don’t need to look much further than Hindu mythology to find the root of this correlation.
The legend for which the first day of Diwali is celebrated, tells how the son of a well-known Hindu King was destined to die from a snake-bite four days after his wedding day. His new wife vowed to keep him alive, and in her wisdom, gathered the family’s collection of gold and laid it at the entrance to the chambers. She then stayed up all night to prevent her husband from going to sleep, telling stories and singing to him. The snake, came, but was too dazzled by the gold to go any further, and left the next morning.
This idea of gold as protection is fundamental to the Hindu culture. In Western society we tend to see gold as a symbol of wealth and luxury. But its role as a material that holds its value against the inflation and uncertainty means that in Hindu and Indian society it is closely associated with security.
As a non-Hindu, why should I buy gold in the Diwali period?
Because gold is so important to the Diwali tradition, the price of gold often rises as a result in the surge in demand around this time of year.
Last year, between the dates of 11th October and the 4th November – a roughly three week period of which the final was Diwali week – the global price of gold rose by 3.9 per cent. In earlier years, the figure has been known to be higher.
A smart investor looking to make a quick profit will have to pay close to the price of gold as well as currency fluctuations and market swings. But long term analysis of gold prices around the Diwali period suggests that there is a small but reliable peak in the price of gold across this roughly three-week period.
If you’re interested in Diwali because of its cultural heritage, or if you’re an investor looking to take advantage of changes in global markets, this is a fantastic time of year to consider buying gold coins or gold bars – just be wary of the predicted surge in the price of gold as demand peaks and be sure to buy at the right time for you!
To keep track of gold prices, check out the live gold price here. If you need some help or inspiration deciding exactly what type of gold to buy over this crucial period, have a look at our commemorative gold coins, or gold bars.
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