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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (36831)	7/8/1999 1:21:00 PM
From: Alex	Respond to of 116753

World: South Asia Gold still valued in India Indians own nearly a third of the world's gold By the BBC's Sanjeev Srivastava in Bombay Indian demand for gold is not likely to be diminished despite the fall in gold prices after a Bank of England auction earlier this week. The Bank's sale of nearly 25 tonnes of gold from its yellow metal reserves led to gold prices crashing to a 20-year low in international markets. In India, there there has been some concern on how this would affect the long-term future of gold prices in the country, the world's biggest consumer nation of the precious metal. Just like in the rest of the world, gold prices have hit a new low there but there is little possibility of gold demand coming down in Indian markets. <Picture><Picture>The BBC's Peter Morgan: "Gold is a commodity which commands fierce loyalties"Prices in the Indian bullion market fell to a 15-year low on Wednesday, as traders in Bombay adjusted the local price to the international gold price which took a beating after the auction. Subhash Jhaveri, a member of the Jhaveri family which owns the country's most famous chain of jewellery stores Tribhuvandas Jhaveri, says the local bullion market is expected to remain depressed and those in gold futures trading are likely to get their fingers burnt as gold prices are set to dip further. However, an adverse impact on the Indian jewellery trade is unlikely because of the fascination Indians have for the metal. Huge private reserves According to bullion market estimates, Indians have nearly 35,000 tonnes of gold - about a third of the total gold circulating in the world. Indians are likely to keep buying goldThe annual consumption of gold in India is upwards of 800 tonnes, which is more than the combined consumption of the next three major gold consumer nations - Italy (400 tonnes per year), US (200 tonnes) and China (150 tonnes). For centuries gold has been equated with money, savings, riches and status in India, and family heirlooms alone may account for more than half of the country's holdings. Each generation thinks it is their responsibility - both to their children as well as ancestors - to add to the family gold reserves rather than exhaust it. Valued as wealth Gold is also regarded as a rain check by many Indians who are either too conservative or ignorant about other savings and money multiplying options like bonds and equity. This is particularly true of rural India, where practically all savings are translated into gold or land holdings. Gold is valued in rural IndiaMost villagers are not sufficiently educated to understand the intricacies of stock market dealings. Many have grown up seeing elders in the household equating gold with wealth and thus the yellow metal holds a strange fascination for them. The Indian demand for gold is also linked to the institution of marriage. Giving, receiving and buying gold at the time of marriage is like a ritual in most Indian families. The decline in gold prices has been quite steep in the past few years. From $385 per ounce in 1996, gold prices slipped to $331 in 1997 and then to $294 early this year. Following the Bank of England gold auction, gold prices crashed to a 20-year low of $257 per ounce. news.bbc.co.uk