Rising gold prices aren’t stopping Diwali shoppers, but they’re changing what they buy

With gold prices on the rise, shoppers are opting for smaller pieces of jewellery and exercising greater caution in their spending during Diwali. For many South Asian families, gifting gold or silver is an age-old tradition passed down through generations. However, this year, the cost of gifting has surged. "We are gonna buy gold for Diwali.

Not too much, not too little, just enough," one shopper remarked. Despite the increased costs, another shopper affirmed they would still be purchasing gold. "I know the prices are up and people will be backing off, but we will buy. Right now, we are on our way to buy gold."

Sellers of gold note that higher prices are not deterring consumers from shopping, but they are influencing the nature of purchases. Vikram Rana, owner of Rana Jewelers, explained, "People used to buy bigger products, now they are buying smaller things but they are buying more of them." This trend mirrors a broader shift in Canadian spending habits, as highlighted by a new survey by the Bank of Canada.

Despite a modest improvement in financial confidence, Canadians exhibit weaker spending intentions due to persistent inflation concerns. Economist Suki Badh remarked, "Uncertainty is prompting consumers to be more cautious, with some opting for smaller purchases as a symbolic gesture." She further elaborated, "There is a bit of uncertainty and most of them (consumers) are being extra cautious.

So it's more of a symbolic gesture, where they buy a token of xyz, but the amount that they buy has gone down and that will have a ripple effect throughout the rest of the year."

TD Bank echoes these sentiments, reporting a slight cooling in gold purchases as gold prices climb. To cater to the cultural significance of gold during festive occasions, TD has been offering Diwali-themed gold coins and bars for a decade. "The first year we did it, there was definitely some interest from the community. Fast forward 10 years later, 10 designs later, and versions of various different symbols that celebrate diwali, we can't keep it on the shelves," said Anthony Herceg, Head of Retail and Precious Metals Distribution at TD.

While the cost of gold may be rising, many families remain undeterred by this increase, ensuring that the festivities continue to glitter with the shine of gold.