For India gold buyers, the world's hungriest investors, the price has averaged 27% gains each year since 1998...
From 1999 to 2008, Gold Investment has given handsome returns to Indian investors and housewives, who are devoted worshippers of the yellow metal in an emotional as well as financial way.
In Indian households, Gold Bullion and jewelry has been a traditional harbinger of good fortunes, and housewives give tremendous importance to their gold possessions as they think gold brings good luck to their families.
In fact, the world’s top finance honchos, who flaunt their MBA-school degrees to hide their ‘goof-ups’ like the US sub-prime crisis, should learn a few lessons from Indian consumers.
Their traditional wisdom has beaten the top business brains in the world with Indian housewives Buying Gold reaping around 27% per year on average during the past decade. And they are still not worried about the recession, because their investments are in gold, which remains an easily sold, highly valued asset from which to raise cash.
The only drawback for India's housewives is that they don’t draw million-dollar salaries like the top level CEOs of multinational financial institutions.
According to the World Gold Council (WGC), the annual average Gold Price has grown year-on-year since 2000 against virtually all major currencies, always providing positive returns.
As of the first quarter of 2009, Gold had already provided a positive return of 17% compared to the average annual price in 2008 of Rs 12,147 per 10 grams. The average price for Q1 of 2009 was Rs 14,180, up more than 16%.
The first three months of 2009 also saw the Gold Price hit new all-time highs above Rs 15,780 per 10 grams, reached on February 24th, 2009.
Gold jewelry has been treasured, sought after and popular since the beginning of Indian history, and still bears an extraordinary significance – especially during festivals like this week's Akshaya Thritiya.
On Akshaya Thritiya – celebrated next week, April 27th – consumers normally make significant gold purchases as gold is an irreplaceable part of Indian culture and a unique monetary asset.
Gold Survey 2009, launched recently by the GFMS consultancy, predicts that in the coming months, the Gold Price could easily re-attain the $1,000 mark for US-Dollar investors, with an added possibility of crossing the $1,100 barrier later this year.
India's love affair with gold, meanwhile, is timeless, spanning centuries and millennia. In India, it always was and still is, much more than just a precious metal. It is part of the fabric of its culture and an inseparable part of its belief system.
In Hindu mythology, some goddesses are described as golden-hued, the ultimate in beauty. Gold, as the basis of so much purity and beauty, is referred to as the seed of Agni, the God of Fire. Manu the ancient law-giver decreed that golden ornaments should be worn for specific ceremonies and occasions. Mythological tales tell us how our Gods and Goddesses rode on golden chariots.
So gold has always been considered a sacred item in the Hindu way of life and is a must in every religious function, the explanation being that gold is pure having passed through fire in its process of evolution.
Over a few thousands of years, many kings, emperors and dynasties featuring countless wars, conquests and political upheavals have ruled the Indian sub-continent. Different dynasties ruled different parts of India with different monetary systems. Gold acted as a common medium of exchange or store of value across the monetary systems of different kingdoms across the sub-continent.
Hence wealth could still be preserved in spite of wars and political turbulence. Gold also helped preserve wealth through natural calamities and disasters and for centuries was the only means of saving in rural India, land being the other main asset of economic value. This has largely helped formulate, or evolve, the Indian sentiment and fanatical passion for gold, which holds true even today.
Private Indian gold-ownership is now estimated to stand at more than 11,000 tonnes of Gold.