6 Reasons Why Indians Love Gold...

India is the largest consumer of gold in the world. Since ages, Indians have a love affair with the yellow metal. Annually, about 700 tonnes or 33% of the total gold mined in the world is consumed in India. That also makes India the largest importer of gold. Majority of the world’s jewellery consumption happens in India. The percentage of the world jewellery consumed in India is the highest. A normal middle-class household buys about 18-20 lakhs of gold jewellery in a life time.

Reasons for the love affair—

     1.       Experts regard gold as the best asset class & the best vehicle for an investment purpose. Over the years gold has not only given fabulous returns but has also served as a hedge against inflation. Over the last 5 years gold has been successful in offering the best returns as compared to any commodity. Looking at a period of last 5 years which saw the collapse of several banks, the Euro zone crisis & lot of other disturbing series of events, gold has emerged the best asset class for investments.

2.      Also, in India there is a lot of emotional value attached to buying of gold. Gold offered in small denomination coins is considered ideal for gifting. Gold is considered to be the medium to reinforce closeness of relationships. Gold is gifted to newborn babies & also, the married couples. Gold is bought for the purpose of wedding, for gifting purpose, for corporate gifts & for stamping a seal on the relationships, new or existing, gold is largely used as a preferred medium.

3.      Over the years gold has gained significance as it lends itself as a commemorative medium to various engagements like golden jubilee, gold medals, golden anniversaries. Also, a gold credit card seems to get a lot of attention.  Anything associated with gold  perceives to add a lot of importance to the said engagement.

4.      In India people tend to buy gold at anytime. They do not restrict buying only to special occasions like festivals, weddings, or any special events. Festivals like Dassera & Dhanteras  are considered the most auspicious to buy gold. The price quotient for the yellow metal is considered to be secondary for these days.

5.      One of the most interesting reasons for this love affair is that Indians consider the yellow metal to be highly liquid. Not only do they term it as a hedge against inflation, but also for exigencies. Gold can be converted to liquid cash anytime & people feel that gold is their best friend.

6. Gold is passed on down from one generation to another & along with the real estate has remained the safest investment over decades. This explains why India is the largest consumer of the yellow metal.