Diwali is widely considered to be the most important festival of the Hindu religious calendar - the celebrations go on for five days each year, and occur towards the end of October or the start of November. This year the big date to remember is October 19th.
Also known as the Festival of Light. Diwali is of crucial cultural importance to many Hindus, and buying gold is considered a fundamental part of the celebrations. Because of this boost to demand, many people from other cultures are starting to take notice of the season as a potential investment opportunity.
Gold and Diwali
From a Western perspective, possessing gold is simply viewed as smart investment. And while that undoubtedly remains true in Hindu culture too, gold is a much stronger cultural symbol too. Looking to Hindu mythology we can see why.
A story closely tied to the festival of Diwali, describes how the son of a King had been prophesised to die from a snake bite. He was saved from this fate by his wife, who piled up so much gold by the door, that the snake was too dazzled to come in and bite the Prince. This day has come to be referred to as 'Dhanteras' among various other names, and its celebration marks the first day of Diwali.
Hindu culture is intrinsically linked with gold, and purchasing the precious metal in the days leading up to Diwali each year is considered a cultural tradition. India is the world's largest consumer of gold and the first day of Diwali is the single biggest day of gold purchasing anywhere in the world.
But a closer look into Indian and Hindu culture reveals that the cultural attachment may be more closely linked with its investment potential than one might immediately think. As you may know, gold is widely considered an asset that holds its wealth against inflation.
When’s the best time buy gold during Diwali season?
Due to the rise in demand of gold during the Diwali period, the overall price of gold often rises in the weeks leading up to, and across Diwali week. In 2016, the price of gold rose 3.9 per cent over a period of three weeks up to and including Diwali.
The phenomenon varies year on year, and, like many things in economics, is subject to a lot of other factors on top of just the demand of gold over Diwali. But an analysis of gold prices in 2016 and most other years since 2010 has shown that the worldwide price of gold often peaks around the Diwali period. An investor looking to make a quick profit could do worse than investing in gold at the start of October and selling it again at the start of November.
Whether or not you're interested in Diwali for cultural reasons, it is clear that this time of year is a fascinating time for the gold market, and presents some interesting and fairly unique investment opportunities.
If you’re considering buying gold over the coming weeks, then make sure you keep a close eye on the price of gold. Your options for what to buy are really broad so do take some time to have a look through the gold bars and gold coins on the market today.
