Less than 1% of the world’s gold is mined in India. The rest comes from somewhere else. Still, India can’t get enough. It is the largest consumer of gold in the world, buying nearly a third of production in recent years. Some estimates say that 10% of all gold is held in India.
Indians save roughly 30% of their income, as opposed Americans, who save 5%. Plus, Indians are getting richer all the time. Once a very poor country, the rich and middle classes now outnumber the poor in this nation of 1.2 billion. The country has the sixth-largest economy in the world.
If people are left alone, high gold demand going forward is a lock.
Yet India’s policymakers are disturbed. Yellow metal purchases have widened the country’s current account deficit to 5.4% of GDP.
The Reserve Bank of India (RBI) has produced a report indicating “a need to moderate gold import, as the insatiable appetite for the yellow metal could jeopardize economic stability,” reports BullionStreet.com.
Read More at DailyReckoning.com . By Douglas French.