It’s that time of year again. Days are getting shorter; the air is getting colder, and holiday festivities are just around the corner. While Christmas undoubtedly enjoys much of the limelight here in the United States, it’s certainly not the only end-of-year celebration on deck.

The Hindu festival of lights, Diwali is a four-to-five-day celebration starting this weekend. It is the biggest holiday of the year for Hindus, Jains, Sikhs and some Buddhists around the world.

As we wrote about last year, Diwali is a significant world holiday that ties in closely with the practice of buying and gifting gold bars, coins, and jewelry. The festival honors Lakshmi, Hindu goddess of wealth and prosperity, and in turn, is regarded as a particularly prudent time to purchase gold as well as other goods.

The Diwali festival typically marks a period of significant consumer spending in India that is often compared to the Christmas shopping season in the United States and other celebrating countries. In 2017, ASSOCHAM, a trade organization in India, estimated Diwali-related online spending would exceed US$4.3 billion. In 2019, even amidst reports of a significant economic slowdown and resulting depressed consumer spending, online sales leading up to Diwali rang in at $3 billion in India, or a 30-percent increase over 2018, according to reporting from TechCrunch. While 30 percent represents a significant drop from 2018’s 93% growth in the same sector, it shows the persistent exuberance surrounding Diwali and its festivities.

Gold’s Role in India’s Economic Downturn

In a September article, The New York Times noted that until last year, India was the fastest-growing large economy in the world, with rates consistently ringing in at around 8 percent or more. In 2019, however, the country began a steep backslide with expansion slowing to a mere 5 percent, as is being reported by government officials. The downturn’s impact is intensified by increasing layoffs across the country. As of mid-August, The Times cites, unemployment had reached a staggering 8.4 percent, which, the Centre for Monitoring Indian Economy predicts will only continue to rise over the coming months.

Earlier this month, Bloomberg reported that growing fear of fallout from “trade wars” popping up around the globe has contributed to spiking gold prices in 2019. Such increases have hit Indian precious metals retailers particularly hard, as shops and other outlets have struggled to get customers through the doors this Diwali season.

Even still, for millions of Hindus around the globe, gold jewelry, trinkets and other products remain revered vehicles for not only honoring cultural traditions but also for insulating families from the worst effects of economic hardships like those being experienced in India today.

While many people in India are facing the harsh reality that investing in and gifting new gold may not be viable this holiday season, it’s not clear that 2019’s downturn will have a permanently deteriorating effect on India’s relation to the precious metal.

Gold in Indian Culture

Gold has deep roots in the Indian culture, playing a prominent role not only during Diwali, but in other essential aspects of Indian life. In particular, gold is often a fundamental element of Indian weddings and all the rituals that accompany them. According to the World Gold Council, approximately “50 percent of annual gold demand” stems from the grand and often lavish affairs that Indian weddings are known to be.

The WGC also touts India as one of the largest markets for gold in the world, pointing to growing affluence in the country as a catalyst for continually increasing demand for the precious metal.

Additionally, as is the case in many parts of the world, the Indian people generally view gold as a store of value, and in some cases, a socioeconomic status symbol. Many Indian people consider the precious metal to be a promising investment. The WGC points out that particularly in rural communities, people view gold jewelry and other items as not only practical but also viable means of storing their wealth.

While cash and other liquid assets are often vulnerable during periods of economic turbulence, gold seems to continue bolstering the financial health of the many Indian people who have previously invested in and continue to seek out the precious metal.

History of Diwali

For countless Hindus, Jains, Sikhs, Buddhists, and even some secular Indians around the globe, Diwali symbolizes the hopeful concept of knowledge triumphing over ignorance, good conquering evil, and light overtaking darkness.

Pankaj Jain, professor of philosophy, anthropology, and religion at the University of North Texas, notes on History that it's impossible to know precisely when Diwali – or "Deepavali" – began. He does, however, point to multiple religious texts to which the holiday has often tied that date back at least 2,500 years.

In northern India, one tale, in particular, is strongly associated with the origins of Diwali. The story tells of the good King Rama’s quest to free his kidnapped wife, Sita, from an evil king in Lanka. King Rama defeats the Lankan king, and, as the story goes, he and his wife make their way back to northern India amidst tons of lamps and other guiding lights spread across the country by citizens celebrating the couple’s safe return home. In turn, celebrators of Diwali light their homes, offices, places of worship, and other areas with candles and lamps, mimicking the light-filled welcome received by King Rama and Queen Sita as they returned to India.

The first day of the festival in many regions is known as “Dhanteras,” although the name and specific practices may vary from region to region. On this initial day, people clean their homes, make decorations, and generally prepare for the revelry to come. Day three is typically the height of the celebrations and coincides with the darkest night of what's known as Kartika, the Hindu lunisolar month. For those in the western, central, eastern and northern parts of India, this day is when revelers don their most beautiful clothes, light up their homes, offices, businesses, and places of worship with diyas and candles, set off fireworks, enjoy family feasts, exchange sweets and other gifts, and perhaps most importantly, offer puja – or worship – to goddess Lakshmi. Some Hindu communities bring the festival to a close with the final day known as Bhai Dooj, which honors the sibling bond between sister and brother. Other communities observe the festival’s end by completing maintenance tasks around their workspaces and offering prayers.

Although the Diwali festival of lights has been an honored tradition in Hindu and other religious cultures for centuries, its meaning, reverence, and impact are certainly not diminished today. The holiday marks an important time in many Indians' lives to practice religious and familial traditions, and also serves as a celebration of prosperity and financial health. If history is any guide, it will continue to do so for centuries to come.