Global Gold Market- Major Players
India is the world’s largest gold market in volume terms, accounting for 22% of the global gold jewelery demand in 2005. Its share in net retail gold investment in coins and bars was 35%.
India’s domestic gold market got a thrust with the government’s liberalization policies initiated in the early 1990s. One of the reforms related to gold was that the government repelled the Gold Control Act, which prohibited holding of gold in the form bars.
With this relaxation demand for gold in India rose and average 10% a year. Sales have averaged 676 tonnes per annum over the past decade, which is one and a half times more than in the United States, the world’s second largest gold market in volume terms. And this is between three and eight times more than in China, Turkey, Saudi Arabia and the United Arab Emirates, the world’s other main gold consuming countries. The US retained its top position in value terms.
Although estimates vary, India is now thought to hold close to 15,000 tonnes or 10% of the world’s entire above-ground gold stocks.The surge in demand also reflective of a super charged economy. However, the prevailing social factors remained a strong motivator.
The growth in demand over the past decade is especially impressive despite the strong price trend in rupee terms over the same period. In 2005, gold price in rupee terms rose 6%, while consumption of gold rose to 750 tonnes from 639 tonnes in the previous year. The growth was stronger in each category like
jewellery, coins and bars, medallions and imitation coins, electronics and other industrial and decorative uses.
It is marriage season in India now. The season covers a period from December to June next year and the dealers are piling stocks anticipating a huge demand for gold.