They say gold doesn’t earn money. When it’s not worn as jewelry, it just sits in your cupboard or your bank locker, whiling away time until the next occasion when it’s brought out and admired. My family, however, found a way to make her sparse jewelry useful even if it didn’t make much sense investment-wise. At the start of every academic year, she would carefully wrap her precious gold chain with a bit of an old saree and hand it over to my father, who would then take it to the bank and pawn it to pay my school fees. A year later, they would have paid the gold loan back, and the cycle would begin all over again. My mother comes from a long line of Indian women who’ve bought gold every month, half a gram here, one gram there, until she had enough to fund my education. India’s relationship with gold is so intricately linked that, as of 2019, Indian households had stocked up to 25,000 tons of the yellow metal. However, much of that gold is physical, locked away as jewelry or invested in the form of bars and coins. Data from the World Gold Council shows that gold bought for jewelry still accounts for three-fourths of India’s demand. That’s a bit inconvenient. India has to import gold to meet the demand. And with the price of the rupee climbing higher and higher—Rs 77.64 for $1 at the time of writing—it sticks the country with a rather large forex bill. But the tide is slowly turning. We now have gold exchange-traded funds, sovereign gold bonds, digital gold… Even market regulator SEBI wants in on the game—it’s planning to roll out spot gold exchanges, where investors can trade in electronic gold receipts. The share of all of these products is also slowly rising, data shows. I’d wager my elderly mother would be amazed—if a bit baffled—if I hand her a piece of paper saying she owns X amount of gold. Maybe Indians may never stop buying physical gold. But the new products will usher in a new set of buyers altogether—investors. It’s already happening in this deep data dive into India’s love affair with gold
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