Why gold makes news on ‘Akshaya Tritiya’

Vibha Sharma

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Chandigarh, April 22

Today is Akshaya Tritiya—the time of year when members of Hindu and Jain communities take dips in holy rivers, pray, fast and also buy their favourite commodity—gold.

Buying jewellery, mostly gold, is one of the rituals people observe on the day, like they do on Dhanteras at the time of Diwali.

However, gold has been on a bull ride for some time now, with prices hitting new highs, and also venturing beyond the Rs-60,000 mark ahead of the festival.

Some corrections were observed on Friday which experts believe may encourage sales.

The Friday dip is expected to support the demand on the auspicious day.

Buying gold on dips makes sense as the precious yellow metal is expected to hit the Rs 65,000 mark in the medium to long term, they claim.

The prices of gold appreciated by 18% in the past one year and the largely underrated silver by 19%.

The trend is expected to continue, reports suggest.

Seemingly now, central banks across the world are also in the race to accumulate more of the precious metal than they used to some years back.

Akshaya Tritiya–the annual Jain and Hindu spring festival

Celebrated largely by Hindus and Jains, the day is symbolic of bringing good luck, success, abundance and fortune to people who pray, fast, do good deeds and give ‘daan’ on the day.

Starting a new business, making investments, buying real estate and of course gold is considered auspicious as the entire day is considered ‘shubh’.

Akshaya means ‘everlasting’ and ventures started on the day are believed to prosper with little or no obstacles — another reason why the day is considered auspicious to buy gold symbolising wealth and considered an asset.

The day, also known as ‘Akha Teej’, falls on the third tithi (lunar day) of the bright half (Shukla Paksha) of ‘Vaisakha’.

Gold and Akshaya Tritiya

In a country like India gold is not just a commodity.

The asset also has sentimental and emotional attachments attached to it as it is passed on from generation to generation as family heirlooms and symbol of love.

Indians buy gold for marriages and other ceremonies in the family and also on occasions like ‘Akshaya Tritiya’ and ‘Dhanteras’ as part of the religious process.

According to reports, gold bought on Akshaya Tritiya two decades back may have given investors 1000% return and silver nearly 900% return.

In fact, the majority of Indians consider gold a safe and profitable investment and tide over the financial hard times.

World is buying gold

However, now countries across the world are acquiring the commodity for various reasons.

The world over, the precious metal is considered a hedge against inflation, currency volatility, etc, a reason why countries appear to be in a rush to acquire it.

In January and February, central banks across the world collectively purchased 125 tonnes—said to be the highest for the year-to-date period since banks became net buyers in 2010, according to the World Gold Council.

Gold reserves in India also increased to 787.4 tonnes in the fourth quarter of 2022 from 785.35 tonnes in the third quarter of 2022.

Experts say India is also buying more gold as a tool of diversification of portfolio and as a cushion against value changes in the rupee vis-a-vis the US dollar.

As an international commodity gold is priced in US dollars.

Any depreciation in the rupee is expected to result in a rise in its price.

Countries with the highest gold shopping in the first two months of 2023 include Singapore (51.4 tonnes), Turkey (45.5 tonnes), China (39.8 tonnes), Russia (31.1 tonnes) and India (2.8 tonnes). Overall, the central banks added 1,136 tonnes of gold worth around $70 billion in 2022—the highest in any year since 1950—according to reports quoting the council.

While Turkey was the top buyer in 2022, these purchases are said to be driven by members of BRICS (Brazil, Russia, India, China and South Africa) countries.

The buzz is that they need gold to support their currencies and shift away from the US dollar.