The Hindu Business Line : A ‘spot’ for gold

With reference to the editorial “A spot for gold” (Business Line, November 23.) The Indian appetite for gold is as normal as that for food. Be it the occasion of marriage or child-birth, it comes naturally to Indians to celebrate it with gold.

Modern marketing tactics — like during Akshaya Tritiya celebrated in the south — are taking it to dizzying heights. The fact that gold is an asset and can be put to good use is little respected by many. While the unscrupulous pawn broker exploits those who go to him, much of the gold is hoarded. It is recycled at enormous loss to the investor.

The quality of your holding is always suspect as the average buyer today is not fully informed about the quality guidelines and markings. If one were to add the holding and storage cost as well as the cost of burglary insurance at market prices, gold as an asset will rank lower than many other freely exchangeable commodities and stocks/mutual funds.

A sustained campaign under an independent agency is needed to propagate gold as an asset as compared to real estate.

Finally, efforts should be in the direction of making India truly claim its rightful place in the gold commodities market.

V. Balakrishnan e-mail

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A ‘spot’ for gold