Its one of the biggest festivals in the world, making the participate of Christmas look small, and not a word by anyone.
So I looked at the bank "discount" offer. The pre-discount price was Rs 112, 802. for the equivalent weight of 1 Troy Ounce. The currency calculator says that 'normal rate' Troy Ounce costs USD$2,099. Kitco shows POG Spot was ~USD$ 1,708. same period. After "discount," the Indian bank's teaser offer is equivalent to USD$ 1,931.10 per Troy Ounce. I have no idea if that real Au premium (AFTER discount) of 13.06% is a good or even fair deal for buyers in India. But I'm sanguine about any business that screams "Discount! Discount! Discount!" Does anyone presume Indian Gold-Bugs are less informed or generally paying so much higher premiums?
I'm in India. Diwali is huge over here. Trying to get something accomplished during Diwali is like trying to get an elephant through the head of a pin or an American to get something done over Christmas week. The elephant's name is Ganesh by the way.
"Melt" is irrelevant, a distraction or red herring. I'm not quoting anyone's melt or wholesale, and neither is the bank. In fact, on 10/25/2012 APMEX sells 10 gram ingots for USD$ 25. over Spot; USD$ 576.52 retail & no discount, today. Meanwhile, the Indian bank's "discount price" for a 10 gram ingot is Rs. (36,064 - 2,885 =) 33,179. or USD$ 619.59 http://www.icicibank.com/Personal-Banking/investments/icici-bank-pure-gold/gold-rate.html POG @ USD$ 54.89 per gram, that Indian bank's "discount" premium is ~ 12.88% while the typical US retail "typical" premium is ~ 5.03%. In other words, the Indian bank's "discount price costs ~USD$ 43. more than APMEX's US price, and the Indian bank's "discount" is 7.47% higher than a retail US gold broker's. I'll state it clearly: that "bank discount" looks like a rotten deal if you can read and do the math. Don't forget that USD$ 43. is alot of money in India; the average monthly wage is USD$ 295. http://www.bbc.co.uk/news/magazine-17543356 Poor consumers should seek better deals, not worse ones: so what's the typical retail premium in India? The WSJ reports from Mumbai, Oct. 25, 2012: "Local gold prices have now fallen by around 5% from their all-time high in September to about 30,800 rupees ($575) per 10 grams, tracking weak global cues..." That Indian market "local" price looks to be nearly the same as APMEX retail, given. So the Indian bank's "discount" remains ... terrible.
World cultures, attitudes, fascination and history re gold are fascinating to study...gosh I love the internet. Last week two Indian women (I'm in the USA) walked into the LCS, stood next to me and whipped out $11K in cash without batting an eye for 1 oz gold bars. Down the street people drop a fortune on sneakers. Fascinating.
Walking into a store and buying something of lasting value (but only symbolic utility) makes perfect sense to me. In Boston, people 'CAMP OUT' OVERNIGHT ON THE SIDEWALK (IN THE WINTERTIME!) - to spend a fortune on Vietnamese-made sneakers. Perhaps it's spec, and they net value somehow - I'm not so sure. Indian men I've spokmen to (Hindu, Catholic, Muslim) have confirmed that Gold-buying is a gendered affair that cuts across language, religion, ethnicity: they call it 'investment' but from context they clearly mean SAVINGS. This is how Indian women store wealth. The men don't seem to care about Gold at all: they just want to talk stocks. What I'm not sure about: how Gold constitutes a 'status symbol' if people cannot see it (if stored/hidden: The Golden Womb.) Presumably, the that's what holidays are for ; ) Hard to fathom what all this means - except that American bullionists are nowhere close to true 'Gold Bugs.' Whoa. http://www.ibtimes.co.in/articles/1...aults-anthropolgy-gold-value-gold-culture.htm
All what is said about gold in India and SE asia is true, yet the other side is not being discussed. There is also a great flood of gold being SOLD after such festivals. Buying gold is many times a cultural affair, with people scraping up as much cash as possible to be seen in the public light as favorably as possible, giving as much gold as they are physically able, just to quietly sell that gold to pay bills a few days later. I would characterize gold buyers in western countries as long term holders, whereas in eastern countries they are more temporary holdings in many cases. I am not discounting the fact India and SE Asia are large importers of gold, just cautioning that spot demand before wedding season or before a large festival is not true long term demand, much of it is short term, (less than a week). After my wedding in Thailand I was asked how much of the gold I bought for her were we going to sell back. When I said we were just going to keep it I got a couple of strange looks.
AHA! Most informative, thank you! FESTIVAL GOLD IS FOR SHOW : like renting an expensive costume for Halloween? This raises a raft of other questions/doubts but might explain why my Indian respondents brushed aside the "wealth" question. It's just 'something women do' after all - and is not so significant ('stored wealth') as Western news items seem to imply. Hmmmm.
Interesting. There is usually a large uptick in Indian visitors to the Brooklyn Museum of Art which has a lovely and substantial Indian art collection is a lovely atmosphere. Last year they even had a huge Indian exhibit on the Vidu. I recommend it to anyone.
Simply put, no one here is interested in India. It is one of the largest and most ancient civilizations in the world, and nobody here could care less.
