Indians hoard 20k tonnes gold worth record $1.16 trn

The World Gold Council’s (WGC) latest estimate of India’s household gold reserves is 11% higher than the 18,000 tonnes it had been pegged at earlier. Coupled with 557.7 tonnes of the central bank’s holdings, gold stocks at known sources in the world’s largest consumer would represent more than 75% of its gross domestic product. Gold prices in Mumbai stood at R32,325 per 10 gm on Wednesday.

Periodic surveys by private firms and independent researchers had, from time to time, pegged India’s household reserves in the range of 18,000 to 24,000 tonnes, but the WGC, the miners’ body whose estimates are widely tracked, has never put Indian household reserves at such a high level.

Anecdotal evidence would point at a significantly higher volume as the estimates don’t factor in unaccounted reserves held by religious institutions and trusts.

The government effectively doubled the import duty on gold to 2% in January and followed it up by raising it to 4% during the budget announcement in March. Gold imports worth $50 billion helped push up the CAD to a record 4.2% of the GDP in the financial year through March. The CAD rose to 3.9% of the GDP

... contd.