Indian Gold Market Has A Top Spot In World Economy

The best alternative depending on the investor’s budget, numerous options are available for investment in gold. Some beneficial gold investment alternatives can be - Gold ETF using a demat account from famous Institutions like INVESCO India gold ETF, SBI gold ETF, and Kotak gold ETF; investing in gold savings fund well known for its systematic investment method; investing in gold mining stocks; investing in physical gold, gold jewellery, gold bars and coins; and investing in equity-based gold funds. 

A person having insufficient funds to invest in gold can get a gold Loan, and online gold loan payment like IIFL Gold Loan Payment has made the accessibility of gold loans better. It enables the borrower to get a lump sum amount of funds instead of gold ornaments or other gold articles like gold bars; bank minted gold coins can be used for any purpose.

The Indian gold and diamond trade contributed up-to 7.5% to the Gross Domestic Product (GDP) of India and further added 14% to India's entire merchandise exports, as per the reports in first quarter of the year 2021. Even the employment sector of gem and jewellery is likely to employ 8.23 billion people by 2022. After the government of India found potential growth and value addition, the government declared that this sector must be the focus area for export promotion. The Indian government has launched several regulations to stimulate the investment and promote the technology and scale to encourage Brand India in the worldwide market. In addition, the government has reduced the import duty for metals like gold and silver to bring down the prices of precious metals in the local market of India.

According to the list provided by the International Monetary Fund and World Gold Council, the data regarding the highest gold reserve as of August 2020 states that India ranks 92 with 657.7 tonnes of gold reserve. The countries who tops the list of highest gold reserves and precedes India are: United States, Germany, Italy, France, Russia, China, Switzerland and Japan. India holds gold reserves with an estimated worth of Rs 254 crore approx, and there has been a continuous increase in the number. Approximately, 6.8 tons of gold was added up in February, 11.2 tons of gold in March, 1.2 tons of gold in April, and 2.8 tons of gold in May, which boosted India’s gold reserves, to a great extent.

After India was recorded to pile up 24000 to 25000 tonnes of gold in the households in India, it is considered the world's largest holder of this precious yellow metal according to the world gold council. It will be even higher when the world's second-largest consumer of gold, i.e. India factoring 608.8 tons of gold in the Central Banks Reserve, and an import duty of 10% of the domestic value of gold stocks, will be attached. 

Due to the appetite for the precious yellow metal, the gold holdings in India had accumulated over the decades even when there was subdued demand in the current years. Even due to the fluctuating price of gold, the Gold Loan interest rates vary. However, there are some other factors for the variation of gold loans from one financial institution to another.

The gold loan schemes like monetisation, bonds, and sovereign coins represent two per cent of the country's annual consumption, but the collection is assumed to go up with the renewed push. If the essential customs duty attracted by Gold rises from the current 10%, it can discourage the import of the same and can risk the higher amount of smuggling of gold. The Indian gold demand surged by 5 per cent after the local gold prices declined, and the Indian rupee strengthened towards the latter part of the quarter. Moreover, there is a chance of improving Gold demand in the upcoming time as the traditional wedding season and festival said Akshay Tritiya is coming forth.

Also Read:- Why choose a Gold Loan before other loans