Mumbai: World Gold Council (WGC) has announced the last chapter of their India Gold Market Series, titled ‘Gold Investment Market and Financialisation’.
As per the report, India, recognised as one of the world’s largest gold bar and coin markets, possesses a thriving investment demand for gold. The allure of gold lies in its safe-haven appeal and the flexibility to convert it into jewellery at a later stage. The landscape of the gold market is evolving due to various factors, including the government’s efforts to ‘bank the unbanked’, increased usage of banking services, and heightened awareness of financial products. These factors have the potential to impact future demand for gold bars and coins.
Mr. Somasundaram PR, Regional CEO, (WGC) India, said, “The quantum of gold held by Indian households, accumulated over centuries, has potential to play a significant economic role in a new growing India. Even as traditional demand drivers seem to face headwinds due to demographic shifts, digital thrust to financial inclusion, changing role of women in society and stronger tax compliance, gold is resilient due to its multiple traits addressing many social and economic needs. The manner in which India has woven gold in its milieu speaks a lot about practical household wisdom, which can be equally tapped for financialising vast stocks of gold in the emerging economic context.
Gold itself, amidst the turmoil of the pandemic, has reinforced its role as a reliable, high performing asset class in times of crisis and this is bound to provide opportunities to use gold to increase overall risk appetite in the economy. Development of gold-backed financial products and fintech gold, all of which provide institutional pooling of gold as an alternative to household custody, should be promoted vigorously as part of overall gold monetisation framework. Exchange trading mechanism and bold tax incentives to promote transparency in buying are fundamental to a more organised recycling market that underpins gold monetisation. The investment side of gold overall looks promising over the next few years as India pushes ahead on formalising many such sectors.“