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In a nation whose love for gold is legendary, financial adviser Biju Daniel is one of scores of Indians who are rethinking how they amass riches through the precious metal.
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Daniel's wife owns at least a kilogram of jewellery and he sports a gold watch. But he is also shrewd enough to realise that the world's biggest gold consumers are falling out of love with wearing their wealth, preferring to stock up on coins, bars and bullion-based investment funds as they look for returns safe from the ravages of inflation and the dictates of fashion.
"The current generation is not serious about gold. They have bangles but they don't wear them," Daniel, of Shreyas Investment Services, told Reuters in his basement office, after wrapping up an offer to clients of the SBI Gold Fund as an investment.
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"Look at college campuses, Indian girls there are not interested in gold jewellery. My wife has about one kilo of gold jewellery but my daughters are not interested."
Demand for gold bars, coins and other pure investments in India, Asia's third largest economy, soared 83 percent in 2010 from the year earlier to 349 tonnes, according to GFMS, a precious metals consultancy that is part of Thomson Reuters.
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The amount of gold used in making jewellery in 2010 rose 36 percent to 685 tonnes -- giving investment demand 34 percent of total buying, up from 28 percent in 2009.
"Gold has come a long way from being a jewellery item to an alternative currency," said Gnanasekar Thiagarajan, a director with Commtrendz Research.
"Investment demand could surpass jewellery demand in the next two to three years," he said.
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Indians' passion for gold dates back centuries and the country is home to one of the world's oldest -- albeit now largely defunct -- mines.
Gold, the ultimate status symbol, is also the gift of choice at celebrations, and jewellery stores across the country heave with customers in the run-up to festivals and the traditional wedding season in a country where brides are often weighed down with the wealth their parents give them.
Overall, gold buying in India jumped 38 percent in the second quarter compared with a year ago, as soaring prices simply fuelled perceptions it was a smart investment as worries about the global economy deepen.
Global gold prices have risen 29 percent in 2011 and hit a record $1,920.30 per ounce on Tuesday. India's domestic gold prices MAUc1 have climbed 33 percent and touched a high of 28,744 rupees per 10 grams on Tuesday.
With India's inflation nudging 10 percent and the central bank's key lending rate at 8 percent, domestic deposits and fixed-income investments are looking especially vulnerable, and the Bombay stock market has fallen 16.5 percent this year.
