Images of India : Learn about Gold, speak to a Sugarcane Farmer…

sugarcanefarm

To gain insight into the weakening gold market, talk to an Indian farmer. In India where an estimated 800 million depend on agriculture and many revere gold as an ornament and store of wealth, growers flush with cash during the harvest season have helped India vie with China as the world’s largest buyer of bullion. Sales usually surge this month in the main festival season of Diwali, with farmers buying gold as religious offerings and elaborate wedding adornments as a bride’s dowry. Weather patterns have led to the driest monsoon season in six years, reducing farm output and incomes. Demand is so weak among the rural Indians making up almost 60 percent of domestic gold consumption that dealers who stocked up before Diwali are offering some of the biggest discounts in decades. That can only worsen the environment for international prices already headed for the 21st century’s longest run of annual declines.