Bappi Lahiri who mesmerized generations with his soulful tracks is no more between us. The legendary musician cum singer who touched millions of hearts was known for his fascination for gold as much as his hit numbers. Fondly called the “Gold Man” of India, Lahiri had a penchant for the yellow metal and wore heavy gold ornaments including rings and bracelets on his fingers and hands.
Lahiri was not the only man with a love for gold. The fetish for the metal’s gloss and grace is significantly high in India. Indians perceive gold as an auspicious metal and prefer it during all sacred rituals. The craze for gold among Indians is easily visible during festivals, especially, during Akshaya Tritiya, a day regarded as most auspicious by Hindus for buying gold. Some temples in the Southern part of the country are considered to be some of the largest repositories of gold with devotees decorating and venerating the Gods with it.
Gold symbolizes prosperity and self-esteem among Indians and that is why many newly wedded Indian brides fully decked up in gold ornaments. Apart from its ornamental value, Indians buy gold as an asset to fall back upon during hard times. Gold is also considered a safe investment option owing to its liquidity. This financial dimension coupled with its socio-cultural aspects explains why India is one of the largest consumers of gold in the world.
Considering how keeping and securing physical gold can be a cumbersome process, many Indians have now moved on to buying gold in its digital form. This can include parking money in Sovereign Gold Bonds or investing in gold ETFs and gold mutual funds.
To tackle the volatility in the dollar market and ensure stability in its foreign exchange reserves, the Reserve Bank of India has been continuously buying gold since 2018. Speaking about gold, Richard Russell, a former American politician had summed it up saying, “Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgit are mere memories.”
With global incidents raking up volatility in the stock markets and underlining chances of price rise synonymous with inflation, many are now disposing of their stocks and stashing away their income and profits in gold instruments. Gold is now a key asset in many financial portfolios. New investors want to benefit from including gold ETFs in their folios.
Statistics shared by the Association of Mutual Funds in India share how investments in digital gold investments by Indians went up by 27 per cent in 2021. The investments were made in gold ETFs with Indians investing up to ₹313 crores in December last year alone. The recent World Gold Council reports how gold ETF holdings remained more than pre-pandemic levels in 2021.