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How Much Gold Does India Have?

December 04, 2011  by: Paulose  Points: 12   Category: Investment  Earning $0.20   Views: 922

India is the largest consumer of gold in the whole world though it does not produce any gold of its own. Studies say that the Indians possess with them 18,000 million kilos gold. India's history, culture and myths have always glittered with gold and jewels.

         

India with with over 1.21 billion people is the largest consumer of gold, even though most of its population live under poverty line. The recent discovery of the 1-trillion-worth treasure from the secret chambers of the Sree Padmanabhaswamy temple at Thiruvananthapuram in South India has revealed the Indian thirst for this yellow metal throughout history. Excluding this great treasure, Dinamalar, a Tamil daily, reports quoting a recent study by the global research firm Macquarie that Indian households hold 18,000 tonnes of gold which represents 11 per cent of the global stock and worth more than $950 billion.

In addition to the gold stock with the Reseve Bank and individuals, the inner sanctum of most of the Indian temples brims with gold offered in devotion to the gods. In spite of importing large amount of gold from other countries, India is also fueling a multi-million dollar gold smuggling racket to evade paying high duty for importing. Increase in consumption of this yellow metal is also one of the reasons for drain on Indian economy and decrease in Rupee value.

Reasons for India's hunger for gold

1) From ancient days gold has been main form of asset in India, even though millions of Indian people live in poverty. Traditionally, gold has been the best way to preserve and invest wealth.

2) Gold for Indians is not just a commodity of luxury, but a part of culture and heritage. It has been a bond of every family through exchanging gold on special occasions.

3) Dowry was given as gold ornaments during weddings. From birth of a child, at every occasion of ritual ceremonies, gold ornaments have to be given as gifts.

4) Market surveys say that almost 70% of gold jewellery in India is sold during the wedding and the festival seasons. Southern states of India, Tamil Nadu, Andhra Pradesh, Kerala and Karnataka, utilize 40% of gold consumption.

5) Gold is considered as the biggest security for women. Whenever there was a need for money, it was easier for them to mortgage or sell their gold to generate cash.

6) Since the price of gold is always increasing Indian people go for purchasing gold as their investment. India and China, emerging successful in their economical growth, want to accumulate gold in order to reduce their dependence on the dollar.

In India, gold imports are the third-largest of its merchandise imports after crude oil and capital goods. As long as the price of gold is on the increase, there will be greater demand in India for this yellow metal.




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