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India’s gold obsession never ends

At a conservative estimate of 15,000 tonnes, India’s privately held gold reserves, at present prices, are valued at $550 billion – nearly 40 per cent of India’s stock market capitalisation of $ 1.4 trillion, reveals a report from HDFC Securities. India’s net retail investment in gold has also doubled from 90 tonnes to 200 tonnes over 2003-08 and is now a $7 billion market. HDFC Securities analyst Anupam Gupta expects that a 1 per cent shift in savings from bank deposits to gold can add 4 per cent to India’s annual gold demand.

India’s obsession with gold is well known. Accumulated over generations, India’s privately held gold reserves are estimated at 15,000 to 25,000 tonnes. At present prices, this is valued at $548-913 billion and can act as a potent driver to sustain the wealth effect in India. While jewellery remains the dominant mode of possessing gold, India’s net retail investment doubled to 200 tonnes in 2008 from 90 tonnes in 2003, reflecting a marked shift in consumer attitude towards gold as an asset, the report said

Another way to look at gold ownership in India is to compare it to annual savings patterns. Indians purchased 660 tonnes, or $19 billion, of gold in 2008, which formed an approximate 15 per cent of physical savings and 5 per cent of total savings. “This implies enough headroom for growth because attitude toward gold ownership changes from jewellery to investment. As attitudes change, we expect Indians to open up to the idea of owning gold as an investment, rather than an asset,” Gupta said.

Gold loans also present a huge opportunity. Even if banks tap 5 per cent of average private gold reserves of 20,000 tonnes, this translates to a market size of $37 billion, Gupta said. Banks and non-banking financial companies (NBFCs), such as Manappuram General Finance and Muthoot Finance are expanding their network to tap into this fast-growing and underserviced market.

News source: MydigitalFC

Picture source: CometoIndia

Previous articles on Gold & India
RBI buys 200 tonnes of gold from IMF
Joy Alukkas to open world’s biggest jewellery shop in Chennai

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The International Monetary Fund said on Monday it sold 200 tonnes of gold to the Reserve Bank of India for $6.8 billion, quietly executing half of a long-planned bullion sale that had threatened to slow gold’s rally.

While the IMF’s plan to sell some of its gold holdings had been flagged for a year before it was formally approved in September, the speed of the deal and the buyer were a surprise for traders, who had expected China — not India — to be the leading contender as Beijing diversifies its vast reserves.

The sale, which an IMF official said was concluded at an average price of about $1,045 an ounce over a two-week period in the latter half of October, will relieve the market of some of uncertainty over how and when the fund would execute its plan to sell 403.3 tonnes of gold, about one-eighth of its total stock.

“This transaction is an important step toward achieving the objectives of the IMF’s limited gold sales program, which are to help put the fund’s finances on a sound long-term footing and enable us to step up much-needed concessional lending to the poorest countries,” the IMF’s managing director, Dominique Strauss-Kahn, said in a statement.

While the threat of IMF and central bank sales did not stop gold prices from soaring to a record high $1,070.40 last month, aided by a falling U.S. dollar, traders said the IMF news could add to the market’s upward momentum.

Full article here

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The world’s favorite jeweller opens the world’s biggest jewellery showroom in Chennai, India. With over 70,000 sq. ft of premium jewellery shopping in the heart of Chennai, Joyalukkas jewellery offers consumers more than a million exquisite jewellery designs from master jewellers in India, Bahrain, Turkey, Singapore and Italy.

With the opening of the first showroom in the Gulf in 1987, the Group has achieved enormous growth, with over fifty stores in the GCC alone, plus London and New York. By 2009, the Group aims to open over 100 showrooms in India and the GCC. The world’s largest showroom in Chennai is an evidence of the growth of the Joyalukkas Group, and has been made possible by the vision of Mr. Joy Alukkas, Chairman, Joyalukkas Group.

Joyalukkas is a household name among the expatriate population in the GCC, including those from India, Pakistan, Sri Lanka, Bangladesh, Philippines and other Asian countries, apart from a large number of international shoppers, the legendary quality of Joyalukkas products have helped the Group to expand into a number of industries that have been enthusiastically received by its loyal customers. The Group now has operations in areas of fashion, information technology, media, money exchange and gold trading.

With an entire floor of the store dedicated to diamond and platinum jewellery customers will be able to chose from a plethora of diamond and platinum jewellery designs in the form of necklaces, rings, ear rings ,bracelets and more. Joyalukkas only offers 100% IGI certified flawless Belgian cut diamonds, and a 100% PGI certified, Platinum jewellery, which ensures that only the highest quality of materials are used to create masterpieces which is a term synonymous with the Joyalukkas brand. All the gold jewellery available within the store is a 100% BIS certified and customers who purchase any gold and diamond jewellery are assured a 100% lifetime money back guarantee.

Full article here

Joy Alukkas website

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