New research from the WGC highlights the fundamental role of India in the global gold market

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Categories: Jewellery, Supply and demand

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The World Gold Council (WGC) today published a research paper entitled “India: Heart of Gold”, which addresses recent developments in the market, in the context of the revival of Indian demand for gold in 2010. The report is the first in a new series on the Indian gold market, with the second scheduled for publication in 2011, which will analyse the strategic outlook for Indian gold demand over the next several decades.

Eily Ong, Investment Research Manager at the World Gold Council, said:
“India is the largest gold market in the world and, as such, the likely recovery of local gold demand to pre-crisis levels is of considerable strategic importance to the wider gold market.

“Gold is an integral part of Indian society and a foundation of wealth and savings in India. As consumers have adjusted their price expectations upwards, a further rise in gold jewellery and investment demand is anticipated and this trend is projected to continue over the long-run as local investors are buying gold driven by wealth accumulation motives.”

Key statistics from the first report in the series include the following:

  • In 2009, total Indian gold demand reached US$19 billion, or Rs974 billion, which accounts for 15% of the global gold market.
  • Over the past ten years, the value of gold demand in India has increased at an average rate of 13% per year, outpacing the country’s real GDP, inflation and population growth by 6%, 8% and 12% respectively.
  • The country currently has one of the highest saving rates in the world, estimated at around 30% of total income, of which 10% is already invested in gold.
  • Based on WGC estimates, the nation owns over 18,000 tonnes of above ground1
  • This is equivalent to nearly half an ounce of gold ownership per capita, a figure which is significantly below consumption in western markets, representing scope for additional future growth. gold stocks worth approximately US$800 billion at today’s gold price and representing at least 11% of global stock.

If you would be interested in receiving the full research paper, India: Heart of Gold, it is available from: www.gold.org/investment/research/

To discuss the findings further, or for an interview with Eily Ong, Investment Research Manager at the World Gold Council, please see below media contacts.

1 Above ground gold stocks refers to all physical fabrication and gold holdings, including private, central bank and institutional