India Witnessing Shift in Gold Accumulation & Consumption

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Players like Augmount, Safe Gold, etc, are into the digital gold line of business, where the purchase is digital but delivery is physical – a model that perfectly suits the new-age yet typical Indian psyche.

One can invest in gold even in fractions – say worth just Re 1 – and let the fractions accumulate till the gold accumulated is decent enough for someone to take physical delivery of it.

Over years, India has witnessed launch of various schemes like gold ETF, sovereign gold bond and gold monetisation scheme, but none of them hit off that well due to a variety of reasons. But there are hopes that digital gold may reach critical mass in India as this country is witnessing a shift in gold accumulation and consumption patterns.

This was discussed at the panel on ‘Markets and Investments’, which was one of the themes at the conference organised by The Free Press Journal and BSE.

The panellists included (in alphabetical order) Ketan Kothari, Director, Augmont; Ranjit Singh, Products and Business Development, BSE; Keyur Shah, CEOPrecious Metals Business, Muthoot Pappachan Group; and Kunal Shah, Head of Research, Nirmal Bang Commodities. The discussions were moderated by RN Bhaskar, Consulting Editor.

The panellists unanimously agreed that there is a change in gold consumption patterns with most Indians. Ranjit Singh stated, “The earlier trend of buying jewellery (as investment) has seen a shift, towards purchasing of gold coins and buying bars, doing ETF trading and futures contracts etc.”

However, trends like ETF have not picked up as expected. “The market has changed now. People are buying digital gold instead of jewellery. There is a lot of investment that has come to digital gold,” Singh added. Yet another scheme which gained traction initially was sovereign gold bond, which was launched in 2015.

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