Interview: Gold Jewelry Sparkles In Both East and West But With Cultural Differences--WGC Official?

New York (Kitco News) - Indian women and the U.S. government both like gold but they have different uses for it. And one might be surprised to discover which holds the most.

Indian women win the contest hands, or fingers, or wrists, or necks, down, according to someone who knows–David Lamb, a managing director of the World Gold Council in London. Lamb’s specialty in gold is watching how it is bought, sold, marketed, designed and worn by women the world over. Much more so in India, which is traditionally known for its fondness of gold. 

“This is an extraordinary statistic showing that Indian women, in their homes and in their security lockers, are actually in charge of 18,000 tons of gold,” Lamb said. “To put that into perspective, the U.S. national reserve held in gold is about 8, 600 to 8,700 tons. So imagine that in the hands of ordinary Indian women is more than two times the amount of gold in the hands of the U.S. Fed.”

Lamb said the gold-jewelry holdings represent not just financial security for each of the women but a huge potential driver for the country’s economic growth, with the Indian economy driven by domestic demand.

“As banks begin to allow those women to collateralize that gold wealth, that can only fuel strength in the economy,” he said. “That will underline not just the cultural importance of gold but the financial importance to a country and to its citizens, particularly its women.”

Lamb was interviewed Wednesday by Kitco News after his presentation on gold jewelry to the Argyle Executive Forum’s gold-market outlook conference in New York. The World Gold Council was the sponsor of the event.

Lamb said gold jewelry is in a fascinating period and he concentrated on the differences in the East and West markets.

“Last year we saw a tipping point for our two lead markets, India and China, for jewelry demand,” he said, noting that the two countries “collectively represent more than 50% of world jewelry demand. Looking at the way wealth is created and the ambitions of consumers within those markets, we see an extremely positive outlook, driving by those two lead markets.”

Lamb said India is an extremely positive market, with a volume increase in 2010 by 39.5%. In local currency terms, the amount that Indian women spent for their jewelry more than doubled by 101%, he said. Each of the two quarters in 2011 has seen volume increases.

“It is an Indian response not just to macroeconomic conditions, but to the vitality of an industry that is constantly putting great design at wonderful prices in front of consumers who can buy,” Lamb said.

The U.S. market, while lagging in volume terms, is showing another side, Lamb said. He said there was a decline in tonnage of 14% in 2010, but that would turn positive in dollar terms. “Our view is that the American market is about to turn into two halves, current and future,” Lamb said. “If current price points are maintained, it is difficult for mass merchandisers to hit the price levels they feel are important for their customers.”

Lamb said the WGC sees in the U.S. market, however, a dramatic new introduction creating new premiums for gold at the top end of the trade. “The future of jewelry in America will be driven by the top end of the market where the physical, intrinsic value of gold is being used not as a barrier, but as justification in a time when you are thinking of fewer and better things,” Lamb said.

source: forbes.com

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Posted in: David Lamb,Gold as an investment,Jewellery,World Gold Council