Whether it’s the high prices or the availability of many other investment avenues that come without any price volatility, something has turned Indians away from being the sure-shot consumers of gold who set the global price with their almost insatiable demand. Today, the price of gold is being determined more by safe-haven investment demand from the US and other developed markets – and is actually inversely related to demand from India.

The Indian festival of Akshaya Tritya was, until five years ago, pretty obscure and restricted only to two states — Tamil Nadu in the south and Maharashtra in the west. But the Indian bullion and jewellery industry realized its huge potential as a sales driver as one of the core beliefs in the festival is that it is auspicious for the buying of gold. With the help of the World Gold Council, a great deal of promotion and publicity turned the festival into a countrywide phenomenon that could be relied on to produce a spike in gold sales. There was talk of it rivaling Diwali as the gold and jewellery sales driver in the Indian calendar.

This year, the festival ran over two days – May 7th and 8th – and held the promise of that much more in terms of sales. The festival sales estimates (there aren’t any official figures) are now in and it looks like even Akshaya Tritya couldn’t get Indians to buy gold. While the pundits said 55 tonnes of gold were sold during the festival last year, most estimates put this year’s sales at between 35- and 40 tonnes. Veteran gold analyst Madhu Sudan Daga, however, thinks actual sales were dismal and pegs the amount sold at between just 5- 7 tonnes!!

Whatever the actual figures, one thing is for certain – while the rest of the world is losing faith in other financial institutions and turning to gold, the Indian consumer seems to be doing exactly the opposite.