Below are the few interesting findings about gold which I think will surprise you or make you knowledgeable about gold related facts.
1) Southern states of India (Karnataka, Tamil Nadu, Andhra Pradesh and Kerala) constitutes around 40% of India’s gold demand. Western states constitutes around 25% to 30% , northern states around 20% to 25% and Eastern states around 10% to 15%.
2) 7% of Indian household saving is in the form of Gold (RBI data 2009-10). But CMIE (Center for Monitoring Indian Economy) suggests around 36%.
3) 90% of the consumed gold in India is imported.
4) Gold and Jewellery constitutes around 30% to 50% of total marriage expenses.
5) Hence weddings generate around 50% of Indian gold demand. Gift range varies from 5 gram from poor families to 4-5 KG from affluent.
6) Despite this high demand, Indian gold jewellery consumption on per capita base is (0.4 gram) below countries like USA and Italy (2009).
7) RBI’s 7% of total reserve is in the form of gold. Whereas USA have 72% and Europe have around 58% of gold as their reserve in their respective central banks (June 2010).
8) Currently India & China together account for approximately 25% of annual gold demand. But Indian above the ground gold stock is around 11% of global stock.
9) 40% to 50% of gold price movements since 2002 were dollar related.
10) Higher Real interest rate (Central Bank’s lending rate-Inflation) leads to lower demand in gold and lower Real Interest rate leads to higher demand in Gold. Equation suggests that a 100 basis points fall in real interest rate will result in an initial 1.5% rise in the price of gold.