FEATURE-India's marriages feed lust for gold
By Indira Vergis
BOMBAY, Sept 17 - Prachi Sawant remembers the excitement in the make-up room on her wedding day. Aunts and cousins, all craned their necks for a glimpse of her bridal jewellery.
Prachi had slowly draped herself with gold: a pearl-studded gold necklace, two thick waist-long chains, a collar necklace, a floral nose-stud, leaf-shaped earrings and a hair band.
A pendant glistened on her forehead, and her henna-dyed hands wore two slim rings and dazzling gold and green glass bangles below chunky bracelets and an armlet. All in 22 carat gold.
Gold, unloved in financial markets and languishing at 20-year price lows, is as popular as ever in Indian society.
At a little more than $250 an ounce, the metal is considered a bargain but no less desirable.
"If you don't wear gold, people will say, look, her parents can't even afford gold for her," says Sandra D'Souza, an employee at a multinational company in Bombay.
As an investment, too, gold still has its merits in India where it has at least cushioned local investors against the impact of a steep fall in the rupee since the early 1990s.
There could have been better alternative investments, but the rupee is not freely convertible and the options are limited.
And it is not just a question of money. Cultural and religious traditions have their own value.
LOVE AT FIRST SIGHT
Even before they crawl, baby girls have gold studs in their ears, or sport a thin gold chain or bangle. And once grown up, they shop along with their mothers for more accessories on birthdays, festivals and other celebrations.
By the time they are ready to say "I do" the Indian way, they will already have accumulated a large collection.
In many parts of the country, gold is often demanded as dowry by the groom's family.
And a good harvest in India's villages is enough to upset predictions of the most seasoned gold watchers.
In 1998, India imported 614 tonnes of the yellow metal, according to the World Gold Council. Imports through unofficial channels would have added another 10 percent to the total.
Demand from India was equivalent to the total new-mined gold production from South Africa and Canada combined.
With India importing practically all the gold it needs, it is causing plenty of anxiety in government circles.
In 1998, India officially spent $5.8 billion in gold bars and biscuits, nearly the same as it spends on oil imports.
Ordinary Indians were oblivious to the International Monetary Fund's plan, now abandoned, to sell its gold reserves. Their trust in the metal as a handy store of wealth never wavered.
For Harish Devadiga, his thin five-gram gold chain has on several occasions been his only hedge against penury.
Everytime he stares at bankruptcy, he rushes to the pawnbroker. "The chain can be exchanged for cash anywhere," he says.
GOLD WORSHIP
Researchers say gold has been known and valued in India for over 3,500 years.
"The cultural value accorded to gold is very high," says A.P. Jamkhedkar, visiting professor at the Ananathacharya Indological Research Institute.
Ancient Indian texts refer to the glittering metal as "born out of fire".
"In ancient times, in religious sacrifices, gold was used as a symbol of God," says Jamkhedkar.
A symbol of purity, eternal value and prosperity, gifts of gold are offered at baby-naming ceremonies, the building of a house, worship of gods and at birthdays or the new year.
Many Indian communities even have an auspicious day for buying gold -- trinkets bought that day are supposed to increase the buyer's wealth in the future.
"Demand for gold will always exist in India. Social customs will make people keep on buying," says Nayan Pansare, group financial controller of Intergold India Ltd.
Come wedding season, hordes of harried parents with excited daughters swarm into jewellery stores and peer over glass counters to inspect countless ethnic designs.
"Demand shoots up during the October to January season which is a combination of the wedding and festival season," says P.C. Gupta, manager at Tribhovandas Bhimji Zaveri Jewellers, one of India's biggest jewellers.
Once the wedding season ends, the gold is stashed away in cupboards or held in bank vaults to be handed down to future generations, adding ounce by ounce to India's vast gold hoard.
That stash is conservatively estimated at 10,000 tonnes or, at today's gold prices, a mind-boggling $82 billion.
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