Indians Buy More than 23 Tons of Gold on a Single Day
As predicted, festival-goers rushed to buy gold in celebration of Akshay Tritiya in India this year. According to the Economic Times, gold sales increased more than 30% during the important Hindu holiday celebrated on April 28. All-told, Indians bought more than 23 tons of gold that day.
Akshay Tritiya ranks as one of the four most important days for Hindus. The word Akshay roughly translates to “the never diminishing.” The day is believed to bring good luck and success. It is also considered one of the most auspicious occasions to buy precious metals, including gold.
Analysts predicted robust sales this year. Last year, a jeweler strike put a damper on the celebration. But resolution of the strike wasn’t the only reason for robust sales this year. Political and economic factors have generally increased demand for the yellow metal in India. Indians faced a cash crisis in recent months, after a government demonetization policy that suddenly declared 1,000 and 500 rupee notes no longer valid. Indians are also concerned about the geopolitical instability in the world.
Interestingly, consumers generally kept their individual transactions small during the festival. They generally avoided cash transactions of over Rs 2 lakh to stay out of reach of the tax department. In January 2016, the Indian government made it mandatory for customers to disclose their tax code, known as a Permanent Account Number (PAN), for gold purchases above 200,000 rupees (a little more than $3,100). The idea was to allow the government to track large jewelry purchases, and more importantly, deter hundreds of millions of Indians outside the tax system from buying gold as a way to hide their wealth from authorities. Dealers simply skirt the rule by dividing large transactions into multiple invoices.
So, while individual ticket amounts were lower, officials say the number of transactions – and the total number of customers – was up significantly this year.
The number of digital transactions were also rather low, accounting for only 30 to 40% of sales, despite a government push away from cash. Of course, it’s easier for officials to track digital sales. It seems clear that despite government efforts for “transparency” Indians want to maintain their privacy.
It is possible to buy and sell gold in the US while maintaining your privacy as well. Download the ShiffGold Guide to Tax-Free Gold & Silver Buying for more information.
The surge in gold sales during this year’s Akshay Tritiya celebration is part of a broader trend. Over the last several months, Asia has regained its appetite for gold. Demand is surging in China, and as one Indian newspaper put it, whether its price goes up or down, Indians cannot take their eyes off gold.
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