Will The Price of Gold Increase During Diwali?
Bleyer Bullion
Bleyer Bullion is the South West of England's premium bullion service serving the whole of the UK and beyond.
Diwali, the Hindu festival of lights, is one of the most anticipated times of the year for millions across the globe. It’s a time of joy, celebration, and gifting—and historically, it’s also a time when gold purchases surge. But with every Diwali season, one question resonates across markets: Will the price of gold increase during Diwali?
In this article, we’ll take a closer look at the factors that influence gold prices during this festive period, explore historical trends, and offer some guidance for those considering gold purchases or gifts during Diwali.
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Why Gold Is So Important During Diwali
Gold holds a special place in Indian culture, especially during Diwali. It’s more than just a precious metal—it symbolises wealth, prosperity, and good fortune.
Traditionally, buying gold during Diwali, especially on Dhanteras (the first day), is seen as a sign of good luck. Families buy gold jewellery, coins, and bullion as a way to invite prosperity into their homes for the coming year.
Naturally, this heightened demand has the potential to impact gold prices, but how much?
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Historical Trends: Does Diwali Influence Gold Prices?
If we look at historical data, there has often been a slight uptick in gold prices during the weeks leading up to Diwali. This is primarily due to the increase in demand driven by cultural traditions and the gifting season.
However, the extent of this increase can vary greatly depending on a variety of factors, such as global economic conditions, inflation rates, and the value of the pound.
For example, let’s take a look at gold prices during the past three Diwali seasons.
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Diwali Gold Price 2021
Gold prices in 2021 saw a more stable performance. In the lead-up to Diwali, prices remained relatively flat, hovering around ￡1,350 per ounce. With global markets beginning to stabilise after the COVID-19 pandemic, the gold price reflected the cautious optimism of the time. However, after Diwali, there was a sharp increase from ￡1,305 on the day of Diwali to ￡1,375 the following weeks.
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Diwali Gold Price 2022
Gold saw a significant rise in 2022, largely driven by inflation and economic uncertainty. During the Diwali period, prices dipped to around ￡1,455 per ounce and continued to decline in the days that followed. However, the market soon rebounded, with gold surpassing ￡1,500 per ounce in the weeks ahead, as more investors turned to it as a safe haven amidst rising inflation and volatile markets.
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Diwali Gold Price 2023
Last year, the global financial markets were characterised by interest rate hikes and persistent inflation concerns, which once again made gold an attractive option. Prices peaked at around ￡1,648 per ounce in the weeks leading up to Diwali, driven by increased demand from India and China, coupled with lingering economic uncertainty. Despite the festive demand, gold prices were primarily shaped by global monetary policies and investor sentiment.
Looking at these trends, we can see that while Diwali does contribute to an increase in gold demand, the broader global economic landscape tends to play a more significant role in influencing prices. Therefore, predicting gold prices solely based on Diwali’s influence can be tricky.
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Factors That Could Impact Gold Prices This Diwali
1. Global Economic Conditions: Global inflation, interest rates, and economic stability continue to be major factors influencing gold prices. Should inflation continue to rise, we might see more investors flocking to gold as a hedge, pushing prices up.
2. Dollar Strength: The strength of the US dollar has an inverse relationship with gold prices. If the dollar weakens, gold becomes more attractive to international buyers, potentially increasing demand and driving up prices during Diwali.
3. Geopolitical Tensions: Any significant geopolitical events leading up to Diwali could also impact gold prices, as investors seek safe-haven assets like gold during times of uncertainty.
4. Demand in India and China: India and China account for more than half of global gold demand. If the economy in these countries sees growth during the festive season, it could lead to increased gold purchases, thereby putting pressure on prices.
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Diwali 2024: What Can We Expect?
As we approach Diwali 2024, current market conditions point towards a more cautious and balanced outlook.
Inflation and economic instability remain concerns, and gold could see moderate gains as investors seek security amidst global uncertainties. However, if inflationary pressures ease, gold prices might stabilise, offering a more favourable entry point for those looking to buy during the festive season.
For buyers focused on tradition and gifting, the overall trend shows that gold prices are often slightly elevated during Diwali due to the surge in demand. However, for serious investors, the broader market conditions should guide your decisions.
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Diwali Gift Ideas
Whether you’re planning to invest in gold or give it as a gift, Diwali presents a wonderful opportunity to share the wealth and prosperity that gold represents. At Bleyer Bullion,?we are delighted to offer our exquisite range of Diwali gold and silver gifts, perfect for those who want to add a sparkle to their festivities.
Our stunning?10g and 20g Diwali Gold Minted bars?offer a luxurious gift option, while our?1/2oz and 1oz Silver Rounds?provide an elegant yet affordable choice. Each silver round comes with a protective capsule and a beautifully designed presentation box, making them ideal gifts for your loved ones.
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Should You Buy Gold During Diwali?
If you’re looking to purchase gold during Diwali for traditional or investment purposes, it’s essential to monitor the markets and be mindful of the broader economic factors at play. While Diwali may contribute to a temporary rise in gold prices, global market trends will have the final say.
Whether you choose to buy gold coins, bars, or jewellery this Diwali, remember that gold’s true value goes beyond its price—it represents wealth, tradition, and a long-term store of value.
Happy Diwali from all of us at Bleyer Bullion, and may your festive season be filled with light, prosperity, and precious metals!
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Diwali Gold and Silver from Bleyer
If you want to get your hands on our Diwali range and want to contact us directly, please do not hesitate to give our friendly team a call on 01769 618618 or email us at?[email protected].
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