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All that glisters is not gold as dowries adapt to India's new wealth

Discussion in 'Business, Lifestyle & Leisure' started by spnadmin, Dec 12, 2009.

  1. spnadmin

    spnadmin United States
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    SPN's stance on dowry. We adhere to the principles laid out in the Sikh Rehat Marayada regarding the payment of dowry: i.e., (l) No Sikh should accept a match for his/her son or daughter for monetary consideration. From Sikh Rehat Maryada, 1971, Section 4, Chapter 10.

    All that glisters is not gold as dowries adapt to India's new wealth


    MATT WADE
    HERALD CORRESPONDENT


    December 12, 2009

    Tarnished outlook ... Delhi jeweller Amit Singh is feeling the pinch as rising gold prices dampen demand and families look at other options for their dowries. Photo: Graham Crouch

    NEW DELHI: For centuries Indian marriages have been sealed with gold. Each wedding season countless brides are given away wearing elaborate sets of golden jewellery including earrings, necklaces, bangles, rings and ''tikis'' worn on the forehead. Gold has been an integral part of the dowry system, outlawed 50 years ago but still widely practised across the subcontinent.

    The ancient link between gold and dowries is one of the main reasons India is the world's biggest consumer of the yellow metal. This national fetish has been lucrative for Australia. India imported $5.7 billion worth of Australian gold last financial year, which is more than Australia made selling coal to China.

    Even today some families start amassing gold as soon as a daughter is born in preparation for her eventual nuptials. In parts of south India, which has more gold per capita than anywhere in the country, wealthy families can be expected to send off a bride with at least a kilogram of gold as part of a marriage arrangement.

    The connection between gold and marriage is enshrined in Hindu mythology. Legend has it that when Venkateswara an incarnation of Lord Vishnu, wanted to marry the princess Padmavati he sought a loan of gold from Kuber, the god of wealth, to pay her father. Devotees still donate gold and jewellery at certain temples in a symbolic gesture to help Venkateswara win the hand of the princess.

    Along with its key role in weddings, gold is used to flaunt family wealth and signify social status. It has also been a popular source of retirement saving and insurance against calamity. No one knows exactly how much gold has been passed from generation to generation and is now stashed in safe deposit boxes across India. But bullion analysts estimate families are sitting on about 15,000 tonnes of gold worth more than $601 billion.

    Increasingly gold is being used as collateral for loans, especially by workers who have no documents to prove their income. When the Reserve Bank of India announced it was purchasing 200 tonnes of gold from the International Monetary Fund last month, many saw it as a symbol of India's love affair with the precious metal.

    Demand for gold normally surges at this time of the year because of the wedding season. But this year's batch of bridal couples will be receiving lower quantities of gold than they might have expected. A record spike in the world gold price has dampened demand and India's 800,000 gold jewellery retailers are feeling the pinch.

    Amit Singh, whose family has traded gold jewellery from a small shop in Delhi's bustling Chandi Chowk market for 75 years, says business is down more than 20 per cent compared with last year.

    ''People are still buying gold but in smaller amounts,'' he said. ''A family that last year would have bought 100 grams is going for 70 grams this year because the price is so high. They are going for lighter jewellery sets.''
    However, something more fundamental might eventually suppress India's appetite for gold. India's modernisation and industrialisation has helped create a wealth of alternative dowry options for the country's rapidly expanding middle class. The dowry for a middle-class female today might include a Kawasaki, a laptop, a plasma television, a Blackberry and a mutual-fund investment along with some jewellery. For the increasingly wealthy and well-educated middle classes gold has shifted from being a rigid contractual requirement for marriage to being a symbolic wedding gift.

    ''As the traditional dowry comes under pressure from social change so too the gold component in the dowry is under pressure,'' says Gary Mead, a commodities analyst from the VM Group.

    Gold has traditionally been viewed in India as an important ''defensive asset'', but gold's place as a form of saving is also under challenge.

    Rising middle-class wealth and improvements in India's banking system have reduced the need for holding a defensive investment like gold.

    ''India's upper and middle classes are driven much more by fashion than necessity,'' says Mead.

    ''It's not going to change over night but over the slow march of time - maybe the middle of this century - younger generations are going to start saying why are we holding on to Granny's gold?''

    Suresh Hundia, the president of the Bombay Bullion Association, agrees that economic and social change will change the nature of demand for gold. But he believes the precious metal will always have a special attraction.
    ''Indians will always be interested in gold,'' he says. ''They worship it.''


    India's multitude of gold traders will be hoping their country's marriage traditions are so strong that brides will wear the traditional golden jewellery no matter what.

    Forwarded by forum member Tejwant Singh ji Malik :cool:
     

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  3. spnadmin

    spnadmin United States
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    LOL Keep your fingers out of the "blackberry bushes" :whisling: Especially the younger growth. Gold doesn't go dead within 2 weeks.
     
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