Diamond & Jewelry News, Advice and Prices for Consumers
Diamond & Jewelry News, Advice and Prices for Consumers
August 31, 2010
I know that there's a huge demand for gold jewelry in India. The Indian economy is progressing rapidly, yet I'm sure that many people find the current rise in gold prices very frustrating and can't afford to buy gold jewelry anymore. Is there any solution to this problem? Do Indian gold consumers shift to other metals and types of jewelry?
September 8, 2010
From what I heard there are other solutions to the problem besides reducing gold Karat. I read that India's jewelry consumers are finding more and more interest in diamonds. Polished diamonds' prices have dropped this year, while gold prices were rising, and therefore diamond jewelry (of metals other than gold I assume) became very popular. India's economy is indeed doing ok, so when it comes to products which aren't becoming increasingly expensive, like diamonds, consumers' demand is very high.
September 2, 2010
One of the solutions which Indian jewelers are currently implementing is reducing the Karat of gold in gold jewelry pieces. I guess that Indians don't find a good substitute for gold and don't wish to stop purchasing gold, thus reducing the Karat while still maintaining a jewelry product's title as "gold jewelry" (as well as maintaining the yellow gold appearance) is a good solution, allowing consumers to buy gold for lower prices. So far gold is still consumed in quite impressive rates, but there's no doubt that the huge rise of gold prices since Feb 2009 has had an effect on gold consumers worldwide, not excluding India.
18 Karat is the most standard gold purity level in gold jewelry produced in India, but nowadays 14 K is also becoming a very popular choice. For every Karat number which is decreased the price of the gold product is reduced by about 4%, according to Bachhraj Bamalwa, vice chairman of All India Gems and Jewelry Trade Federation. Bamalwa implies that 14 K might not remain the most common gold purity level for long, since gold prices are still on the rise. It seems that 10-9 Karat gold pieces are expected to become more popular in the very near future.
Besides aesthetic issues, reducing the gold purity level might have problematic implications, since jewelers would have to work with metals which might be too hard (gold adds softness to the jewelry metal). Still with gold prices reaching close to 17,000 rupies for 10gr gold there doesn't seem to be a better option.
Reducing gold Karat will certainly make gold jewelry in India less worth while in terms of investment, as re-selling of the products in the future wouldn't enable gaining a significant profit.
