HT Bureau
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GUWAHATI, July 16: The World Gold Council has recently unveiled the latest instalment of its India Gold Market Series, titled ‘Gold Investment Market and Financialisation’. The report highlights India’s position as one of the largest markets for gold bars and coins worldwide, showcasing a thriving investment demand for precious metals. With its safe-haven appeal and the flexibility it offers as a future jewellery asset, gold continues to captivate Indian investors.
The dynamics of India’s gold market are undergoing a transformation propelled by several factors. One significant aspect is the government’s initiatives to “bank the unbanked,” which aims to extend banking services to a larger segment of the population. Additionally, there has been an increased awareness of financial products and the utilization of banking services across the country. These factors collectively have the potential to shape the future demand for gold bars and coins.
Somasundaram PR, the Regional CEO of the World Gold Council, India, emphasised the economic significance of the substantial gold holdings within Indian households. Accumulated over centuries, these gold reserves possess the potential to play a vital role in India’s growing economy. Despite traditional demand drivers encountering challenges due to demographic shifts, the rise of digital financial inclusion, changing gender roles, and enhanced tax compliance, gold remains resilient.
Amidst the turmoil caused by the pandemic, gold has once again proven its role as a reliable and high-performing asset class during times of crisis. This characteristic offers opportunities to leverage gold and increase the overall risk appetite within the economy. The report emphasizes the development and promotion of gold-backed financial products and fintech gold, which enable institutional pooling of gold as an alternative to individual custody. These initiatives form an essential part of the overall gold monetization framework.
Looking ahead, the investment prospects for gold in India appear promising. As the country continues to formalize various sectors, the investment side of gold is expected to flourish in the coming years. By recognizing and capitalizing on the practical household wisdom ingrained in the Indian culture, stakeholders can tap into the enormous potential of gold to contribute to India’s economic growth.
