Gold rush unabated
With their insatiable hunger for gold, most Indians seem to have voted against the curbs sought to be imposed by the government on gold imports and gold consumption.
In April-June, the demand for gold rose 71 per cent in volume terms (310 tonnes), while global demand fell by 12 per cent in the same period, according to the World Gold Council. The price of gold went down 12 per cent in this period, which fuelled demand. Interestingly, the rise in gold prices in India saw a new two-year high of `1,310 on Friday, touching `31,000 per 10 gram. It shows people are shifting to gold as stock market indices hit a two-year low and the rupee touched 62 per US dollar in intra-day trade.
The government and the Reserve Bank are perhaps not getting the message being sent out by the huge demand for gold. Since the results of their moves haven’t been a great success — while official imports are down, smuggling is up — the government could try some of the suggestions by the All-India Gems and Jewellery Federation. They have suggested a plan under which a small portion of the gold lying with the public can be deposited with designated nationalised banks, which would issue certificates carrying an interest of 3.50 per cent for three years, after which the gold would be returned by weight. This, it is claimed, could well unlock over five per cent (1,000 tonnes) of the idle gold lying with the people of India.
Post new comment