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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.
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