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All that glitters…is gold!

The vaunted Big Fat Indian Wedding may soon have a new moniker – the small, slim Indian wedding thanks to rampaging gold prices that are throwing all nuptial budgets into disarray. With the price of the yellow metal touching a scalding Rs 28,000 per 10 grams this week – up from Rs 20,688 on January 1 this year—and almost triple of what it used to be two years ago, Indian families are going into a huddle to think up ways to tackle this albatross.

They fear the gold prices’ continued staggering climb would take the luster off the upcoming festive celebrations of Diwali as also the crazy Indian wedding season.

Some people are even going to the extent of putting off their weddings while the others are having to compromise with buying minimal jewelry.

In a bullion-obsessed India, gold is imbued with a deep cultural and religious significance. Indians regard the metal as auspicious and a symbol of wealth and prosperity. Daughters from the majority Hindu population are traditionally gifted gold ornaments for their marriage. Known as streedhan (women’s wealth), they serve as insurance for the girl in the eventuality of a divorce, maltreatment by the groom or widowhood.

No Indian bridal trousseau is considered complete without an array of glittering gold ornaments and accessories – from sparkling necklaces and earrings to chunky bracelets and anklets. The metal is seen as a much more reliable asset than even real estate or cash.

It is, therefore, not uncommon for families to funnel a whole lifetime’s saving into buying as much gold as they can afford for their children’s weddings. Many even take loans or pawn their valuables for the purpose. Fake or gold-plated jewelry isn’t an option as it is fairly common for potential in-laws to have experts verify the metal’s purity.

However, with average Indian salaries hovering around $200 a month, even middle-income families are finding the price of gold too daunting. Brides and grooms are under relentless pressure to buy less and less.

Jewellers, meanwhile, are watching in dismay as buyers troop into their shops. And leave without purchasing much. Many are plumping for designs that retain the metal’s bulk and luster but in which the gold content has been substantially whittled down.

In keeping with the changing dynamics of the trade, Gen Next goldsmiths are tweaking tradition. They are importing technology and alloys from Europe to make ornaments in novel ways. This, they say, is vital to help them retain their customer base without playing havoc with their bottom lines. Many are using hollowing techniques that help them shave off gold content by as much as 50 per cent.

A few goldsmiths are also countering the price volatility through innovative measures like offering gifts and freebies on gold savings schemes. Some are employing old or scrap gold in larger quantities as it has a lower carat value.

So at this rate, will gold soon become an outdated commodity in India, a country hitherto regarded as the cornerstone of the global gold physical market? After all, the Indian gold jewelry sector accounts for roughly 75 per cent of the total domestic gold consumption.

Not really. According to a World Gold Council (WGC) report, rising income levels of urban Indians, tax concessions in the Union Budget 2010-11, normal monsoon forecasts for this season, overall acceptability of gold as the most liquid asset among rural population and investors’ preference are some of the factors that will keep the demand for gold buoyant in the days to come. Besides, the precious metal, whose key drivers are investment and jewelry, is still seen as a safe haven in times of economic turbulence and high inflation.

If all else fails, then there are always the 10 million marriages that take place in India every year that will ensure that gold never completely loses its sheen in the country.

Neeta Lal is a New Delhi-based journalist