Role Of Gold In India

favourable:report
SEPTEMBER 2006

The Role of Gold in India
By Natalie Dempster, Investment Research Manager, World Gold Council
India is the worlds largest gold market in volume terms, one that has grow considerably during its period of liberalisation. This report provides a broad overview of the gold market within the context of Indias naked as a jaybird super-charged economy. It looks at all the major aspects of demand and supply, including how the jewelry sector is world affected by the current social and economic changes, new ways to invest in gold, the role of the Reserve aver of India and on the supply-side, mine production and the scrap market.
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Sales substantiate averaged 676 tonnes per annum over the past decade, which is one and a half multiplication to a greater extent than in the United States, the worlds flake largest gold market in volume terms (it is the largest in value terms), and between three and eight times more than in China, Turkey, Saudi Arabia and the United Arab Emi targets, the worlds opposite main goldconsuming countries (Figure 1). The strength of demand over the past decade

is oddly impressive when juxtaposed against the price, which has risen almost continuously in rupee terms over the same period (Figure 2).



withal in 2005, despite a 6% rise in the gold price in rupee terms, gold expending rose to 750 tonnes from 639 tonnes the previous year, with growth in each social class (jewellery, coins and bars, medallions and imitation coins, electronics and other industrial and decorative uses).

Figure 1: Annual Demand1 for Gold (tonnes) 10 year average, 1996-2005

Market size of it: A league of its own
India is the worlds largest consumer of gold in tonnage terms. In 2005, India accounted for 22% of global gold jewellery demand and 35% of all net retail investment (coins and bars). Gold

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demand has grown at an average annual rate of 10% since the repeal of the Gold Control Act in 1990, which had forbidden

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