ALL THAT GLITTERS
Indians are buying gold today. It’s the holy festival of Akshaya Tritiya, a day deemed particularly auspicious to buy gold.
Like many in the West, Indians are motivated to buy gold as an investment.
But a mix of religious and cultural traditions also contributes to the nation’s “unfettered love” for the yellow metal, making it the world’s biggest gold market.
Indian households are thought to contain more than 18,000 tonnes of gold. “This is enough to supply Americans with all the gold they want for the next 100 years,” economictimes.com noted recently.
Average gold sales of between 40 and 42 tonnes have been reported during recent Akshaya Tritiya festivals
This year, higher gold prices are expected to dent sales – but only marginally. As economictimes.com’s recent poll revealed, 85% of respondents are keen to buy more gold this time around.
So how do Indians prefer to buy gold gold? According to World Gold Council figures, 500 tonnes was used in jewellery last year. Gold jewellery is a symbol of wealth, status and good fortune in India - more than 70% of purchases are marriage-related.
Investment product purchases accounted for 366 tonnes, or one quarter of world’s demand for gold bars and gold coins!
Even though the total is down on the previous year, India’s combined investment and jewellery demand for gold added up to a whopping 933 tonnes in 2011. No wonder it’s their second-largest import after crude oil.
So is there anywhere else on Earth to rival such an insatiable appetite for gold?
Just recently, the World Gold Council predicted that China was poised to overtake India to become the world's biggest gold market in 2012 “while India’s importance in the gold market will not diminish.”
Gold is pervasive in the East, and people’s love for gold a key demand driver unconnected with world economic events.