‘Delhi or Kochi, this metal is hot property’, Times of India, 27 November, 2013

Kochi: Finance minister P Chidambaram may describe gold as a costly non-essential commodity,but for the average Malayali, the yellow metal still retains its allure.A study done by Kochi-headquartered think tank,Centre for Public Policy Research (CPPR) on gold consumers in Delhi and Kochi – to detect investment patterns among consumers found that people tend to buy gold irrespective of the final price.The study covered customers who visited 13 jewelleries in both cities in the month of August.We wanted to check consumer behaviour in northern and southern parts after FM announced a hike in import duties and asked Indians not to buy gold, said Mary Honey,who researched the topic.The pattern shows that over the past three years,gold was a major source of investment for consumers in Kochi.Whereas,the diverse employment opportunities in Delhi have made people more aware about investment options other than gold.Stocks,government and oil bonds,post office savings and insurance are some major investment preferences among Delhiites.

Most of the consumers in Delhi opt for a planned gold purchase whereas in Kochi consumers are impulsive buyers.Price is the most important factor among Kochi consumers while respondents in Delhi gave high preference to design and quality.While gold price is not frequently updated as among consumers in Delhi,most consumers wish to purchase when the price drops and they sell their lot when the same skyrockets.

It is interesting to note that gold purchase is triggered when the price is slashed but the demand does not die down when price is increased,particularly in Kochi,said Mary,adding that this factor has a lot of implications when authorities formulate policies to curb gold consumption.

A staggering number of the people in both cities are of the opinion that gover nment should reduce the import duty as they think gold is an essential commodity, the study said.

People in both cities believe that duty reduction would end smuggling.As compared to other states where tax on gold is only 1%,Kerala is ranked first for having the highest tax rate on gold at 5%.

‘Kochiites prefer gold to real estate’, Deccan Chronicle, 27 November, 2013

Though real estate sector has been considered as one of the safest investment options in Kerala, a recent study shows that more people in Kochi prefer gold as a better and safer investment option. In the last three years, 70 per cent of Kochi residents opted for gold against nine per cent who chose real estate. According to a study by the city-based think-tank Centre for Public Policy Research (CPPR) on `Gold and consumer behaviour ­ A comparative study of Kochi and Delhi,’ only 38 per cent of Delhiites chose gold as a major investment option.

As per the study, most people prefer to invest in gold due to their reluctance to take risk.

The objective of the study was to understand the investment patterns of gold to know consumers’ behaviour towards the yellow metal and also to identify how the fluctuations in the gold market affect consumers. Responding to the survey, city residents remarked that they prefer gold because of its stable nature and high returns.

The study was conducted among diversified groups such as trade and commerce, especially from

spice, jewellery and shipping trade, and also IT professionals.

In Delhi, 20 per cent preferred Public Provident Fund (PPF). They consider PPF useful for post-retirement life and also remarked that it gives safer and better returns with high interest rate. Stocks, government and oil bonds, postoffice savings and insurance are the other major investment preferences in Delhi.

While 80 per cent of consumers in Delhi go for a planned gold purchase, only 65 per cent of Kochiites plan it in advance which shows that Kochi consumers are more impulsive.

IN THE LAST 3 YEARS, 70% of Kochi residents opted for gold against nine per cent who chose real estate. According to a study, only 38 per cent of Delhiites chose gold as a major investment option.
As per the study, most people prefer to invest in gold due to their reluctance to take risk.

‘A glittering investment option for Kochiites’, The New Indian Express, 23rd November, 2013

Though they are not an informed crowd when it comes to variation in gold prices, the customers in Kochi city are ‘Impulsive’ buyers of the yellow metal. In the last three years, 70 per cent of consumers in Kochi prefer gold as a major investment option which is almost double the investor sentiment in New Delhi, the national capital.

These are the major findings in the latest research paper named ‘Gold and Consumer Behaviour – A Comparative Study of Cochin and Delhi by Centre for Public Policy Research (CPPR), a city-based research organisation.    The study done by CPPR  Research Associate Mary Honey O J concludes that gold customers in Kochi and Delhi are price insensitive in nature.

Setting the context, the study says, “Only three of its gold mines are working full-time (Hutti and Uti mines in Karnataka and the Hirabuddini mines in Jharkand) and producing about 0.5 per cent of the country’s annual gold consumption. India has to import gold to meet the stupendous gold demand.”

According to the report, in the last three years, 70 per cent of consumers in Kochi have opted for gold as their major investment option as against 9 per cent of consumers who chose real estate as their major investment option. The respondents were consumers from select gold jewellery outlets in Kochi and New Delhi.

“In New Delhi, 38 per cent of the respondents opted to invest in gold and 20 per cent opted for Public Provident Fund (PPF) in the last three years as their main investment options. The daily and weekly updation of gold price among consumers in Delhi comes to 78 per cent as compared to Kochi at 42 per cent. Nearly 37 per cent of consumers in Kochi update themselves on a monthly basis,” it said.

The study makes it clear that gold is price sensitive at low prices but it is insensitive to price increase, especially in Kerala.

In Delhi, 80 per cent of consumers go for a planned gold purchase where the planning period ranges from three to six months. However, in Kochi, only 65 per cent of the consumers plan their purchase in advance. For people of Kochi design is of least concern than price and quality, the study stated.

It is predicted by the World Gold Council (WGC) that the demand for gold in India in 2013 will be in the range of 865 tonnes to 965 tonnes.

Malayala Manorama, 29 November, 2013

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  1. Biju says:

    Being a Malayali , I too would prefer Gold, real estate market don’t have stability, prices keeps on fluctuating every time & troubles come back to back .

  2. annavijoy says:

    gold demand will remain inelstic as long as it plays the most important role in our dowri system,since its been our tradition.Its demand will be elastic in future as this trend is going change in the longterm;the ‘new’ generatiion would prefer high utility gadgets ,fancy apartmens and trendy vehecles to gold .

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