An Indian wedding tradition dating back thousands of years is more than a simple cultural practice - it has become one of the biggest drivers of global gold demand.
In a Feb. 12 CBS News' "60 Minutes" report, correspondent Bryon Pitts took a look at how the Indian wedding tradition of draping the bride in gold jewels has propelled India to be the biggest source of global gold demand. India is now No. 1 in gold consumption of jewelry as well as physical bars and coins.
India accounts for about 32% of the global gold market with half of the gold Indians buy spent on jewelry for the 10 million weddings held there each year.
As a result, gold prices typically rise ahead of wedding season as families prepare.
"The demand for gold out of India is fundamental for the health of the industry," Ajay Mitra of the World Gold Council told Pitts. "If India sneezes, the gold industry will catch a cold."
Gold: A lavish Indian wedding tradition
Indians place an enormous value on gold. They consider no possession more valuable and enjoy flaunting their collections - especially at weddings.
The bride's family makes sure she is adorned in thousands of dollars' worth of gold jewels, which will serve as her financial security once she joins her husband. Indian brides start receiving gold as presents when they are young girls, in preparation for their wedding day.
"The gold will show off the prosperity and the stand of the family in the society," Indian wedding planner Divya Chauhan told Pitts on "60 Minutes." "It's not vanity. It's just something so culturally ingrained in us that you can't have reasoning around it."
How much gold a woman brings to a marriage gives her financial control and power in her new life. The gold she wears is a symbol that she deserves to be taken seriously; that she has her own assets aside from her husband's.
Families and friends also offer the new couples gold bars and coins as presents.
The Indian wedding season runs from about late September through January, in between heavy monsoon rains and the summer heat. Jewelers look for price dips in the months before to stock up on the yellow metal before demand picks up. Of course, Indian buyers always hope for deals when buying wedding gold, but the price is rarely a deterrent.
"Most households start saving for a marriage years in advance, so a small dip or rise in the price of gold will not upset demand," bullion businessman Motabhai Kainan told Commodity Online.
For instance, gold prices rose 64% (compared to the Indian rupee) from January 2010 to September 2011. Indian gold consumption in September 2011 was up 5% from the same period a year prior.
And as India's population gets richer, global gold demand and consumption will increase.
Emerging economies and global gold demand
On average at least 30 to 40 grams of gold is involved in every wedding, with richer households averaging several kilos of gold at a ceremony. Economists predict that higher per capita income will cause the average amount of gold used in weddings to double over the next five years.
India's rapid economic growth rate has bolstered the emergence of middle-class families, which along with the rich now outnumber India's poor population.
In addition to earning more than before, Indian households save an average 30% of their incomes, compared to 5% for U.S. households. Indians use this savings to buy more gold.
But India isn't the only emerging economy that will fuel global gold demand. Turkey is another nation that emphasizes gold as wedding presents.
Turkish brides typical receive a 22-carat gold set that includes a 60-gram necklace and a pair of earrings. The couple also buys gold wedding rings, a solitaire ring for the engagement, and more earrings. The total cost for wedding-related gold items reached more than $5,600 (10,000 Turkish lira) in 2010.
Vietnam has also seen a sharp increase in gold demand. Vietnamese bought more gold per capita last year than China or India, according to the World Gold Council. The demand pushed gold prices in the country up by 18%. Vietnamese prefer to keep their savings in gold because the metal's more stable than paper currency.
Wholesale Gold Group (WSG), a U.S.-based gold and silver investment firm, said emerging economies' impact on global gold demand make now one of the best times to buy gold, especially coins.
"China and India are importing as much gold as they can get their hands on," WSG founder and CEO Michael MacDonald told Commodity Online. "Unlike paper currency or even oil, the amount of gold on the planet is rapidly diminishing. Applying simple supply and demand economics to the situation tells you that now is the time to buy gold coins."
Gold rose 9% in January and after a slight pullback ended last week at $1,722.10 an ounce on the New York Mercantile Exchange.