| Most people, including the more educated | | | | of the total domestic gold demand in 2009. Making |
| investors, are not aware of the fact that there | | | | things more exciting for the gold market is that |
| has been a strong, clear, and consistent seasonal | | | | Indian consumers have adjusted their price |
| demand for gold over the last 30 years during the | | | | expectations upwards; "Given the rebound in gold |
| second half of each year, and in most cases | | | | demand and higher price expectations WGC |
| prices have followed suit. The question is posed to | | | | expects a positive outlook for the Indian gold |
| me all the time, "Why?", and the reality is that | | | | market for 2010." It has readily become apparent |
| that there are a confluence of factors, some of | | | | that not only have Indian consumers been heavy |
| which are fundamental, while others are more of | | | | buyers of gold in jewelry form, but in recent |
| a technical nature; but none the less, prices have | | | | times they are steadily increasing their demand of |
| consistently been heading to the upside, and that | | | | gold as an investment vehicle. The "WGC believes |
| trend has been even more distinct and profound | | | | that Indian investors may continue to move into |
| during this current 'bull market' over the last | | | | gold as an insurance policy to protect their wealth |
| decade. | | | | from the aftermath of the global financial crisis |
| Who is the traditional gold buyer? We need to | | | | since there are few assets that have the ability |
| recognize who they are and to do so we need to | | | | to hold their value during extreme conditions." |
| understand the tangible and fundamental reasons | | | | China is the second largest buyer of gold in the |
| for buying gold. In India, first and foremost we | | | | world and it appears that they are quickly |
| have found the largest gold buyers in the world, | | | | becoming the dominant consumer in just about |
| making up over 800 tons per year, and the vast | | | | every commodity, and that includes gold. The |
| majority of their purchases are made up of the | | | | total volume of gold traded on the Shanghai Gold |
| jewelry demand. They have a long tradition of | | | | Exchange jumped 59% in the first six months |
| buying gold in that nation, as it has always been a | | | | from a year earlier to the equivalent of 3,174.5 |
| way of preserving wealth in their culture, and | | | | metric tons, and the Silver turnover soared more |
| most of their purchases come from their rural | | | | than fivefold, which is a staggering number and |
| areas comprising approximately 65% of the | | | | just underscores the potential for this country. |
| demand. The Indian Monsoon season also plays a | | | | Chinese physical bullion demand is expected to rise |
| critical role in determining the amount of the gold | | | | by over 12% to over 450 tons a year as Chinese |
| demand for the year. Typically every year around | | | | investors have shown their willingness to buy |
| May, the Indian population begins planting their | | | | more when prices are on the rise. Another |
| crops just before the Monsoon season which | | | | increase of a staggering 40% comes in sales of |
| normally occurs during the summer months. Later | | | | gold products such as bars and coins by China |
| in September is when the harvesting of the crops | | | | National Gold Group Corp. which is the owner of |
| begins and if the Monsoon season is a successful | | | | the country's largest gold deposit. The Chinese |
| one, demand for gold consequently moves higher. | | | | and Eastern Asians also have seasonal buying |
| This year, according to India's weather office | | | | patterns for gold as many people buy at the time |
| predictions, the country should benefit from a | | | | of Chinese New Year which is in the late January |
| normal rainfall in the June-September monsoon | | | | to early February time frame. Throughout the |
| season, which is of course good news for Indian | | | | festivities, Chinese people take pains to display |
| farmers as it raises hopes for a good farming | | | | their gold prominently because it signifies good |
| season usually portending a fine year for India's | | | | fortune while also contributing to the price of gold. |
| gold demand. | | | | In the Northern Hemisphere, demand is usually |
| In India there are several different periods when | | | | weakest during the summer, especially during |
| gold buying peaks and prices usually soar. These | | | | August when European jewelry manufacturers |
| auspicious days, usually religiously oriented, are | | | | are essentially shut down. Requests for gold and |
| thought to be favorable for occasions such as the | | | | gold products are the greatest heading into fourth |
| "Marriage Season" which commences in October | | | | quarter in anticipation of US and European religious |
| and lasts through to the following May, and during | | | | holidays such as Christmas in which gold |
| this period gold is bought in quantity, partly to | | | | manufacturers are usually restocking inventories |
| enable the bride to come to her groom covered | | | | heading into the season. |
| in gold and bearing it as her "dowry". Another | | | | These are the traditional fundamental reasons |
| such phase where it is thought advantageous to | | | | that have been driving gold prices higher in the |
| buy quantities of gold is during the "Festival of | | | | second half and into the first quarter in most |
| Lights" in the month of October. In one more of | | | | years, but of course there are technical factors |
| this series of Indian gold uses we find distinct | | | | as well, and most professional gold traders |
| spikes in the months of January and September, | | | | recognize these fundamental factors that are |
| because at that time manufacturers typically refill | | | | usually emerging as they enter into the third |
| inventories to realize the demands of two Indian | | | | quarter of the year. Throughout this 10 year 'bull |
| wedding seasons, including the festival of Diwali, | | | | run' all of the aforementioned positive factors |
| starting in the month of November and ending in | | | | have intensified going into the first quarter of the |
| December, and the second which begins in late | | | | following year. With all of the above mentioned |
| March and continues through early May. | | | | factors in play it becomes increasingly apparent |
| According to the World Gold Council, 10 million | | | | that prices will certainly rise in the very near |
| marriages take place every year in India, and the | | | | future and the time to make your gold and |
| demand for those occasions account for a | | | | precious metals purchase is as soon as possible. |
| substantial proportion of the overall global jewelry | | | | Thank you for your time and comprehension in |
| purchases. According to the council, the Indian gold | | | | reading this narrative concerning the optimum |
| jewelry sector accounts for an astounding 75% | | | | timing to make your precious metals purchases. |