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Cropped_Power of Gold

Shenoy Karun
Shenoy Karun

1) Gold consumption in India varies seasonally and is driven by various festivals throughout the year such as Onam, Diwali, and Dussehra. 2) The article discusses gold consumption patterns across four regions in India and how consumption increases during wedding seasons and major festivals. 3) It also provides details on how gold prices are determined globally based on prices set in London, and how that price is then used to set consumer gold prices in India.

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* THE TIMES OF INDIA, MUMBAI TUESDAY, OCTOBER 18, 201614 TIMES NATION Every year, after a short lull during monsoon, gold sales in the country pick up again with festivals. It is Onam that kick-starts this string of festivals across India. Shenoy Karun writes how gold consumption pattern differs from season to season across the country and presents the bigger picture of the worlds total production and its major producers HIGH SALES LOW SALES HOW FESTIVALS DRIVE GOLD CONSUMPTION IN INDIA AKSHAYA TRITIYA | One of the four most auspicious days in the Hindi calendar, believed to bring good luck and success DASARA | Celebrates the defeat of demon king Ravana by Lord Rama, symbolizing the triumph of good over evil - considered to be an auspicious day to begin new enterprises GUDI PADWA | New Year for Maharashtrians; marks the beginning of spring SHRADH | A week set aside for ancestral worship DHANTERAS | The 鍖rst day of Diwali festival; the blessings of Laxmi, goddess of wealth, are sought DIWALI | The third and primary day of the 鍖ve-day Festival of Lights DURGA PUJA | The most important festival in Bengal, usually celebrated on the 6th to 10th days of the waxing moon in the sixth month of Bengali calendar. ONAM | Annual harvest festival in Kerala PONGAL | From the Tamil for boiling over, a festival in celebration of the harvest Kerala market States annual consumption of gold 60,000 kg Number of gold stores in the state 6,000 MAJOR SUPPLIERS | State Trading Corporation, Metals and Minerals Trading Corporation of India, Axis Bank, HDFC Bank, State Bank of India and Scotiabank SOURCE: INDUSTRY SOURCES SOURCE: LONDON BULLION MARKET ASSOCIATION 1 2 3 4 1 NORTH ZONE Rajasthan, Haryana, Punjab, Delhi, Chandigarh, Uttar Pradesh, Uttarakhand & Kashmir JAN - MARCH Marriages APRIL - MAY Harvest JUNE-AUG Monsoon SEPT-DEC Dasara, Christmas HIGH HIGH LOW HIGH 3 EAST ZONE Odisha, Bihar, West Bengal & other eastern states JAN - MARCH No Marriages APRIL - MAY Marriages JUNE-AUG Monsoon SEPT-DEC Marriages, Durga Puja, Diwali, Christmas LOW HIGH LOW HIGH 2 WEST ZONE Gujarat, Madhya Pradesh, Maharashtra & Goa JAN - MARCH No Marriages APRIL - MAY Marriages, Gudi Padwa, Akshaya Tritiya JUNE-AUG Monsoon, Shradh SEPT-DEC Marriages, Dhanteras, Dasara, Diwali, Christmas MEDIUM HIGH LOW HIGH 4 SOUTH ZONE Kerala, Karnataka, Telangana, Tamil Nadu & Andhra Pradesh JAN - MARCH No Marriages (EXCEPT FOR JAN IN KERALA) APRIL - MAY Marriages, Akshaya Tritiya JUNE-AUG Monsoon SEPT-DEC Onam, Diwali, Christmas, Pongal, Marriages MEDIUM HIGH LOW HIGH WHO DECIDES THE PRICE OF GOLD? For spot gold, London is the global centre. Nearly 87% of the global trading volume of spot gold, futures and options had been happening there. London Bullion Market Association (LBMA) Gold Price, which is generally known as the London price, is 鍖xed twice a day at 10.30 am and 3 pm. Apart from London, there are two other major centres of gold trade New York and Shanghai. Prices of gold futures traded on New York Mercantile Exchange, US, and the prices at the Shanghai Gold Benchmark auction, China, also serve as reference prices. Twice a day, LBMA gold price is 鍖xed by 13 participants of the auction administered by Intercontinental Exchange Benchmark Administration (IBA) The banks or trading 鍖rms in India like State Bank of India, Nova Scotia, and MMTC buy gold at the LBMA gold price rate, add import duty and VAT and sell it to local jewellers The actual price you pay in the shop includes the cost of making the jewellery, which is slightly higher than the prices published in the newspapers Everyday, Trade bodies in India use LBMA gold price and also the trading price at New York Mercantile Exchange to reach a reference price for their member shops 1 3 2 4 HOW GOLD IS PRICED different stages THE POWER OF G LD SOURCE: COMPANY REPORTS; GFMS, THOMSON REUTERS Barrick Gold 190.3 Newmont Mining 156.6 AngloGold Ashanti 122.8 TOP 3 GOLD PRODUCERS (2015, in tonnes) Graphic: Karthic R US 192.8 Germany 123.8 Iran 70.9 India 849.9 Saudi Arabia 84.5 Vietnam 63.4 Thailand 90.2 China 1,037.3 SOURCE: WORLD GOLD COUNCIL CONSUMER DEMAND (2015, in tonnes) CHINA AUSTRALIA RUSSIA UNITED STATES PERU CANADA SOUTH AFRICA INDONESIA MEXICO GHANA UZBEKISTAN BRAZIL ARGENTINA PAPUA NEW GUINEA MALI COLOMBIA KAZAKHSTAN PHILIPPINES TANZANIA CONGO 275.9 252.4 216.0 175.9 158.7 150.7 134.3 124.6 95.1 80.8 64.1 49.1 47.5 46.8 83.2 57.2 47.6 46.8 45.7 6 8 12 13 15 18 TOP 20 GOLD MINING COUNTRIES SOURCE: GFMS, THOMSON REUTERS REST OF WORLD 54.72 WORLD TOTAL 3,157.71 Production in 2015 (in tonnes) 1 2 4 5 20117 171614 193 9 10 458.1

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Cropped_Power of Gold

  • 1. * THE TIMES OF INDIA, MUMBAI TUESDAY, OCTOBER 18, 201614 TIMES NATION Every year, after a short lull during monsoon, gold sales in the country pick up again with festivals. It is Onam that kick-starts this string of festivals across India. Shenoy Karun writes how gold consumption pattern differs from season to season across the country and presents the bigger picture of the worlds total production and its major producers HIGH SALES LOW SALES HOW FESTIVALS DRIVE GOLD CONSUMPTION IN INDIA AKSHAYA TRITIYA | One of the four most auspicious days in the Hindi calendar, believed to bring good luck and success DASARA | Celebrates the defeat of demon king Ravana by Lord Rama, symbolizing the triumph of good over evil - considered to be an auspicious day to begin new enterprises GUDI PADWA | New Year for Maharashtrians; marks the beginning of spring SHRADH | A week set aside for ancestral worship DHANTERAS | The 鍖rst day of Diwali festival; the blessings of Laxmi, goddess of wealth, are sought DIWALI | The third and primary day of the 鍖ve-day Festival of Lights DURGA PUJA | The most important festival in Bengal, usually celebrated on the 6th to 10th days of the waxing moon in the sixth month of Bengali calendar. ONAM | Annual harvest festival in Kerala PONGAL | From the Tamil for boiling over, a festival in celebration of the harvest Kerala market States annual consumption of gold 60,000 kg Number of gold stores in the state 6,000 MAJOR SUPPLIERS | State Trading Corporation, Metals and Minerals Trading Corporation of India, Axis Bank, HDFC Bank, State Bank of India and Scotiabank SOURCE: INDUSTRY SOURCES SOURCE: LONDON BULLION MARKET ASSOCIATION 1 2 3 4 1 NORTH ZONE Rajasthan, Haryana, Punjab, Delhi, Chandigarh, Uttar Pradesh, Uttarakhand & Kashmir JAN - MARCH Marriages APRIL - MAY Harvest JUNE-AUG Monsoon SEPT-DEC Dasara, Christmas HIGH HIGH LOW HIGH 3 EAST ZONE Odisha, Bihar, West Bengal & other eastern states JAN - MARCH No Marriages APRIL - MAY Marriages JUNE-AUG Monsoon SEPT-DEC Marriages, Durga Puja, Diwali, Christmas LOW HIGH LOW HIGH 2 WEST ZONE Gujarat, Madhya Pradesh, Maharashtra & Goa JAN - MARCH No Marriages APRIL - MAY Marriages, Gudi Padwa, Akshaya Tritiya JUNE-AUG Monsoon, Shradh SEPT-DEC Marriages, Dhanteras, Dasara, Diwali, Christmas MEDIUM HIGH LOW HIGH 4 SOUTH ZONE Kerala, Karnataka, Telangana, Tamil Nadu & Andhra Pradesh JAN - MARCH No Marriages (EXCEPT FOR JAN IN KERALA) APRIL - MAY Marriages, Akshaya Tritiya JUNE-AUG Monsoon SEPT-DEC Onam, Diwali, Christmas, Pongal, Marriages MEDIUM HIGH LOW HIGH WHO DECIDES THE PRICE OF GOLD? For spot gold, London is the global centre. Nearly 87% of the global trading volume of spot gold, futures and options had been happening there. London Bullion Market Association (LBMA) Gold Price, which is generally known as the London price, is 鍖xed twice a day at 10.30 am and 3 pm. Apart from London, there are two other major centres of gold trade New York and Shanghai. Prices of gold futures traded on New York Mercantile Exchange, US, and the prices at the Shanghai Gold Benchmark auction, China, also serve as reference prices. Twice a day, LBMA gold price is 鍖xed by 13 participants of the auction administered by Intercontinental Exchange Benchmark Administration (IBA) The banks or trading 鍖rms in India like State Bank of India, Nova Scotia, and MMTC buy gold at the LBMA gold price rate, add import duty and VAT and sell it to local jewellers The actual price you pay in the shop includes the cost of making the jewellery, which is slightly higher than the prices published in the newspapers Everyday, Trade bodies in India use LBMA gold price and also the trading price at New York Mercantile Exchange to reach a reference price for their member shops 1 3 2 4 HOW GOLD IS PRICED different stages THE POWER OF G LD SOURCE: COMPANY REPORTS; GFMS, THOMSON REUTERS Barrick Gold 190.3 Newmont Mining 156.6 AngloGold Ashanti 122.8 TOP 3 GOLD PRODUCERS (2015, in tonnes) Graphic: Karthic R US 192.8 Germany 123.8 Iran 70.9 India 849.9 Saudi Arabia 84.5 Vietnam 63.4 Thailand 90.2 China 1,037.3 SOURCE: WORLD GOLD COUNCIL CONSUMER DEMAND (2015, in tonnes) CHINA AUSTRALIA RUSSIA UNITED STATES PERU CANADA SOUTH AFRICA INDONESIA MEXICO GHANA UZBEKISTAN BRAZIL ARGENTINA PAPUA NEW GUINEA MALI COLOMBIA KAZAKHSTAN PHILIPPINES TANZANIA CONGO 275.9 252.4 216.0 175.9 158.7 150.7 134.3 124.6 95.1 80.8 64.1 49.1 47.5 46.8 83.2 57.2 47.6 46.8 45.7 6 8 12 13 15 18 TOP 20 GOLD MINING COUNTRIES SOURCE: GFMS, THOMSON REUTERS REST OF WORLD 54.72 WORLD TOTAL 3,157.71 Production in 2015 (in tonnes) 1 2 4 5 20117 171614 193 9 10 458.1