Shocking news!! In India, the use of gold declined because of the Omnicron virus. The decline is because of the fear of the virus, causing fewer weddings in India. The incredulous reaction from readers is that how can this be true?
India and China have the biggest jewelry industries in the world. Jointly they buy one-third of the world’s gold production for use in the jewelry industry. The Jewellery industry uses fifty percent of all gold consumption worldwide. The jewelry industry uses a staggering ten times more gold than the bullion coin industry!
Some of the important festivals in India and China are the Chinese New Year in February and Diwali in October and November of each year. It is customary for people to exchange gifts at this time of year consisting of gold jewelry.
Statistical data does not support these trends. There is no data to confirm that these events influence the price of gold during the festival months or that jewelers buy bullion in larger quantities during these months.
The data reflects that jewelers will buy gold when the gold price is low. This strategy enables them to stock up on inventory when the price is low and resell when the demand is high during the festivities.
The individual purchases by jewelry buyers do not influence the market or the price of gold. The combined effect of these purchases has a significant influence on the market. Consequently, the fear of the Omnicron virus impacts directly on the jewelry industry. The fear causes a softer demand from jewelers to buy gold.
Gold and silver coin holders traditionally follow the same pattern. Many investors are holding on to their investments and are not selling their coins. It is because they are afraid of rising inflation. They are concerned about the printing of money in the world.
Investors are holding on to their bullion and are relying on it as a haven when other investments are at risk should the world economy declines further. Now is an ideal time to buy bullion and add it to your investment portfolio.
The price of bullion averaged around $1800 over the last 12 months. This price may seem high, but some experts see the price much higher if inflation and the economic uncertainty continue into 2022.
Now is a good time to buy bullion. Most dealers and refineries have online websites to assist you in buying your bullion. You can buy bullion consisting of cast or minted bullion bars. The gold bars contain a very high purity of around 99.99%.
It is best to shop online and compare prices since the bullion dealers sell bullion bars at a premium above the spot price of gold. The premium on the bullion bars includes the labor to cast or mint the bars, packaging, and commission.
Conclusion
The jewelry industry has a huge influence on the gold price. We can expect that buying by the jewelry industry will increase once governments lift the lockdown measures. With the Chinese New Year looming in the not-so-distant future it is an opportune time to buy bullion.
