Why Do Gold Prices Go Higher During Festive Seasons?


This Dhanteras and subsequent Diwali celebrations, jewellery shops experienced a double-digit rise in gold and diamond jewellery sales. Retailers stated that they anticipate the forthcoming wedding season to support and generate momentum in demand for jewellery in the nation.

Industry estimates show despite inflation, sales of gold increased 35% during Dhanteras compared to the previous year. As a result, the prices went up.

Whether it is Dhanteras, Diwali, Navaratri, or Holi, gold prices surge during these times.

Gold is seen as a valuable commodity, and the 1-gram gold rate in India tends to go up during festive seasons as people are more likely to buy and invest in it. Gold is also associated with prosperity and culture and is often given as gifts during these times, which drives demand and prices.

What causes a rise in gold prices during the festive season?

There are a few reasons gold prices may rise during festivities. Let us see some reasons:

1. Gifting option

The festive season is the time of gift-giving and receiving in India. Throughout this time, people give gifts to their friends, family, and loved ones on various occasions.

This increases demand for gold jewellery as it is considered a preferred gift among Indians. Thus, gold or jewellery prices increase during these periods.

2. Good discounts

During Diwali and other festivals, shops and other retail outlets offer attractive discounts on gold jewellery and making charges, which causes an increase in demand and, consequently, pushes up the prices.

It is a fundamental theory of the market that excessive demand results in higher prices. Consequently, the prices of gold and jewellery made of it went high.

3. Auspicious

Gold is considered auspicious in India because it symbolises wealth and prosperity and is thought to bring good fortune. Finally, gold is considered sacred and often used in religious ceremonies.

Thus during festivals, people buy gold to bring good fortune and luck for themselves, thus increasing the 1-gram gold rate in India.

4. Diversification

Diversification is essential when investing, and adding gold to your portfolio can help accomplish that goal. Gold tends to move in the opposite direction of other asset classes, which can help offset any losses incurred in their other investments.

5. Highly liquid

If investors need to liquidate their position in the market, they may easily sell gold and receive cash against gold because of the metal’s high level of liquidity.

Investors looking to sell gold may search for local gold buyers or visit a reputable buyer like Muthoot Gold Point, who will guarantee they receive the highest cash against gold.

Due to the use of cutting-edge technology to verify the weight, gold’s current price, and purity, selling gold through Muthoot Gold Point is hassle-free. Since the gold is assessed before the seller, the highest cash against gold is ensured.

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