Indian households hold over $950 billion of gold: Macquarie

Discussion in 'Economy & Infrastructure' started by Galaxy, Dec 6, 2011.

  1. Galaxy

    Galaxy Elite Member Elite Member

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    Indian households hold over $950 billion of gold: Macquarie


    5 DEC, 2011


    NEW DELHI: India's innate fascination with gold continues as Indian households hold gold worth over $950 billion which in turn is around 50 per cent of the country's GDP in dollar terms, says a report.

    Gold consumption is part of India's culture and tradition and the country is the world's largest consumer of gold, followed by China.

    Indian households hold 18,000 tonnes of gold which represents 11 per cent of the global stock and worth more than $950 billion, around 50 per cent of India nominal GDP in dollar terms, says global research firm Macquarie.

    According to Macquarie, 7-8 per cent of India's $329 billion in household savings was held in gold in 2009-10.

    With gold evolving as a store of value more than an adornment, rising gold prices have also contributed towards increasing Indian households' "perceived wealth".

    Macquarie used the term "perceived wealth" because most Indian households are reluctant to part with their gold jewellery and other gold holdings, even at times of crisis, as doing so is considered a stigma, it said.

    Notwithstanding the 64 per cent cumulative rise in gold prices, (in rupee terms) between January 2010 and September 2011, gold consumption in India in volume terms (including jewellery and net retail investment) is still holding strong.

    During the first three quarters of 2011, there has been a 5 per cent year-on-year increase, on the top of 72 per cent year-on-year growth registered in 2010, Macquarie said.

    Although during the quarter ended September, 2011, gold demand in volume terms declined 23 per cent over last year largely owing to sharp depreciation in rupee, high gold prices and inauspicious times according to the Hindu calendar.

    However, in value terms "India still remains the world's largest consumer of gold as of September, 2011, in tonnage terms," Macquarie said.

    The report further noted that rising gold consumption is one of the reasons for a depreciating rupee.

    "Gold imports alone have contributed nearly 40 basis points to the 130 basis points widening in India's current account deficit between FY'08 and FY'11," Macquarie said.

    Gold imports are the third-largest of India's merchandise imports after crude oil and capital goods. In 2010, about 92 per cent of the supply of gold in India was met through net imports and the rest through recycled gold and other sources.

    Indian households hold over $950 billion of gold: Macquarie - The Economic Times
     
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  3. Galaxy

    Galaxy Elite Member Elite Member

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    All bank should introduce Gold Savings Scheme with 8%-10% fixed return per annum on Face value of Gold, compound. That asset can help our economy to grow in double digit and can provide government initiative in Infra development too.

    Also, we have much more than 950 Bn$. It could be around equal to our GDP size means 1.7 trillion $. Half of the gold would be with corrupt politicians like Mulayam, Lalu, Mayawati, Sharad pawar, Sonia Gandhi,Jaylalitha, and more such leaders.
     
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  4. KS

    KS Bye bye DFI Veteran Member

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    Just 11% ??

    [​IMG]

    After visiting Indian marriages i thought it would be much more.
     
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  5. indian_sukhoi

    indian_sukhoi Regular Member

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    Want Proof - Invite yourself in Indian weddings!! :rolleyes:
     
  6. Yusuf

    Yusuf GUARDIAN Administrator

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    How does buying gold depreciate the currency? If that is the case why would the RBI buy some 200 tonnes of it recently?

    Fascination for gold never goes in India. A small ring costs nothing less than 10k these days. Most of the recent buys of gold by Indians have been more as investment with even the common man joining in and wanting to reap benefit of rising gold prices. This has only increased the prices further.
     
  7. Neil

    Neil Senior Member Senior Member

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    i guess yusuf bhai...it is for security...when RBI prints currency it needs security against it...so the best bet is gold...
     
  8. Galaxy

    Galaxy Elite Member Elite Member

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    Gold will continue to shine due to supply-demand concept.

    I think 100 Bn $ worth gold only there in Temples. Few hundred Bn $ in lockers.

    There is one more angle to it. Gold is considered as good investment as per Hindu tradition. Almost all Hindu family who can afford Gold do buy irrespective of price. Also, all ladies like to have gold ornaments more than anything else. People need Gold for Marriage, party, festival, saving and to make use of Gold ornament. It's tradition and culture and not only investment.
     
    Last edited: Dec 6, 2011
  9. hit&run

    hit&run Elite Member Elite Member

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    I was searching for such an estimation since ages. Thanks Galaxy
     
  10. hit&run

    hit&run Elite Member Elite Member

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    I was searching for such an estimation since ages. Thanks Galaxy

    So Gold reserve 946.7 tonnes and household hold 18000 tonnes total 18946.7. hummm not bad.
     
  11. Iamanidiot

    Iamanidiot Elite Member Elite Member

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    household reserves are estimated reserves and real value might be even more
     
  12. trackwhack

    trackwhack Tihar Jail Banned

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    This report cannot be correct. The first report of India's private gold estimates in 2009 had the same figure of 18,000 tonnes. I could not locate that report but in then in 2010 again WGC came out with the 18,000 tonnes figure. The Hindu : Business : India's fundamental role in global gold market

    Now one year and more than 1000 tonnes of imports later, they are quoting the same figure. The truth is that no one knows what the true figure is, not even a ballpark figure.

    But since WGC started becoming more transparent with their gold import statistics.

    Between 1990 and 1999, India's imports were between 400 and 800 tonnes of gold a year. At an average 600, that would mean 6000 tonnes in the 90's.

    Between 2000 and 2009, India's imports were between 700 and 900 tonnes of gold a year. At an average of 800, that would mean 8000 tonnes of gold. In 2010, we imported 959 tonnes of gold and in 2011 till data close to 1000 tonnes.

    Hence since 1990 itself India has imported 15500 - 16,000 tonnes of Gold.

    So as per the report in the 5000 years prior to 1990, that India has be dwaddling with gold, our net consumption was just another 2000 tonnes. Yeah right.

    Many of you may have read this but here is an estimate that someone who has done some research made about 5 years back.
    Indian Gold Reserves. Forgotten History! New Opportunity? � 2ndlook

    The truth is India probably has between 30,000 and 40,000 tonnes of gold. But there is no way to get a true estimate.

    and btw These figures are purely based on white money. The gold saved as black money could be as much or maybe more.
     
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  13. Yusuf

    Yusuf GUARDIAN Administrator

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    I agree that the real gold reserves could be well above that. During the license raj, so much gold was smuggled. Gold smuggling was the common profession of erstwhile Bollywood villains!!!

    India had good mines in Kolar and Hutti. Wonder how much good was dug out from there.?
     
  14. Iamanidiot

    Iamanidiot Elite Member Elite Member

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    India historically imported gold bullion we never had extensive deposits of gold
     
  15. trackwhack

    trackwhack Tihar Jail Banned

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    About 1000 tonnes Yusuf. In fact Kolar Gold fields was the first gold real commercial gold mine. All earlier gold was found as nuggets or surface skimming, rather than digging for gold.

    Here is an interesting Wiki read, but hey its Wiki. Gold mining - Wikipedia, the free encyclopedia

    And one more http://mining.about.com/od/Gold/a/Kolar-Gold-Fields-Slow-Fall-Of-A-Gold-Colossus.htm

    In fact KGF should be declared a National Heritage Site. The place has so much history.
     
    Last edited: Dec 6, 2011
  16. pmaitra

    pmaitra Moderator Moderator

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    I was looking at this conversation.

    So, if RBI has a certain amount of gold and has printed a certain number of currency notes, then the total value of gold with RBI divided by the total number of rupees is the value of one rupee, going by gold standard convention. Now, more the currency is printed, lower the value of rupee becomes, because the amount of gold is fixed. This is one way inflation can happen.

    Now, the question is, how does RBI buy gold? Someone please explain.
     
    Last edited: Dec 7, 2011
  17. Yusuf

    Yusuf GUARDIAN Administrator

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    Usually printing excess currency leads to higher inflation that is known.

    When I was a kid I always use to wonder why we have a fiscal deficit and why govt needed to take loans from abroad for projects when we could just print notes for it. :D
     
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  18. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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  19. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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  20. Blackwater

    Blackwater Veteran Member Veteran Member

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    I have 10 kilos of gold at bank locker for investment purpose........jai ho
     

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