Apparently Indians are fully aware that unlike what Bloomberg may wish you to believe to the contrary, fiat debt notes are NOT the best vehicle to preserve wealth. Indian households have reportedly stashed 3x the stockpile of physical gold as the OFFICIAL US gold reserve!
New Delhi: Indian households have piled up as much as 20,000 tonnes of gold, worth $1.16 trillion, an historic high. This shows that the government’s efforts to trim overseas purchases of the idle asset by imposing an import duty and raising it in short intervals to reduce the current account deficit (CAD) haven’t yielded the desired results.
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.