India And Gold

wealthymatters.comThe picture on the right might be what comes first to mind when a lot of people think about India and gold–A bride decked out in gold ornaments.

Here interesting facts about Indians and gold:

India is the world’s largest buyer of gold, accounted for 32% of the global demand in 2010.

India’s annual consumption demand has risen from an average of 300-400 tonnes (1998-2004) to about 900-1,000 tonnes in the last three years (2008-2010).

India’s demand for gold rose by 106% Y-o-Y,in 2010, substantially higher than the 60% recorded by the second-fastest growing market- China.

Indians invest over 11% of the gross savings in gold, against less than 2% by the Chinese.

The household stock of gold in India is currently estimated at 18,000 tonnes,about 15 grams per person on an average, (up from 10,000 tonnes in 1991-92), worth over $950 billion, which is equal to 55% of India’s GDP and about 11% of the global stock of gold. It is 2.2x higher than the official gold reserves of US and more than the combined gold reserves of the top-15 countries after US.

In India, in the last decade, gold has outperformed equities.A preference for safety and liquidity is behind the abiding love India has for gold.

About Keerthika Singaravel

3 Responses to India And Gold

  1. prakash kl says:

    You are right in the sense that Gold provide a great investment alternative. Before 2011, Gold is a safe investment. But nowadays the daily fluctuation in the price of Gold is more than 1% which is disturbing. I think when the safe and stable and less fluctuating nature of Gold is decreasing, the investment in Gold may decrease. Gold is mainly invested to safeguard other investments.

    I have a website which tells about all the investments in Gold in India.

  2. Yes ,but the schemes hardly caught on in India. After all gold in India is seen as an asset to be cashed in at times of distress.What is the point of keeping gold away from oneself where it would be unavailable during emergencies?

  3. Gold Coin says:

    The government announced a new initiative in its 1999/2000 budget to tap the hoard of private gold in India by permitting commercial banks to take gold deposits of bars, coins or jewellery against payment of interest.

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