Ad Here  
Research for survival... Indian GST – Between extremes… Kudos to GIM organisers... An eco-friendly commute in Mysuru In the horns of a dilemma Weaving wealth of western Tamil Nadu What the big B should offer? Land, land everywhere, but... Industry can’t get it from Mars, yet INDIA keeps its date with destiny Tax evaders’ get out of Jail-Free Card Much ado about nothing Why (not) abolish? 1800 parties registered with EC – Less than 60 contest elections Economy through the month Little surplus after salaries, subsidies and debt servicing South India’s 100 most valuable companies A tale of two Bihar babus Welcome move to widen the tax net… The deluge and the several kindly souls A Fine division of responsibilities Deming awardees galore! Strategic planning the missing link Much can be done by us BJP can now hasten its thrust for reforms Need plan over the long term planning Public investments and welfare will surge A dual GST that will protect prosperous states Babes In the wood-RBI North block has little clue to curb inflation CAD and the emergency thereof They add lustre to Padma Awards An eventful week with VVIPs of Delhi Trail-blazing Tamil Nadu Low profile moves Welcome rains for damaged roads... Need for radical RBI reform Two welcome measures from the chief minister... CSR, tech revolution and bank crisis Better relations with UK... A historic indirect tax reform Ganesh’s mantras MS Installed Healthy finances of the Chennai Corporation Technology and economic development should be linked Welcome Measures. Work for 10X Change Star of the South When the examiner cheated... A blueprint for the future Rail-road Rajaraman Wanted: decentralised financial system How will it PAN OUT No groundnuts in groundnut oil! TN - so much to offer... Pool energy prices Sustainably developing manufacturing sector… Skewed Economic Zones? The Great Fall Make way for Make in India... Focus on southern TN... If not Tamil Nadu, where else? Chennai Airport-Ready for a rapid take off... You too T M Krishna? A gratifying record Reform this licence to…kill Focus on agriculture and human resources Babes In the wood-RBI North block has little clue to curb inflation Tryst with GST PC please be our Santa Breaking news or breaking credibility? Jobs - Lost, Changed or Gained Policy Makers Miles to go... After all, customer is the king Outward ho Well-administered State Cleansing Indian retail Oh my GOLD Sowing seeds of hope It’s raining funds for states. Really? Sardar Sarovar – the seventy year itch Truce at Kasturi Buildings Why throw baby with bath water?
Oh my GOLD
GOLD gets dug out of the ground in Africa. Then we melt it, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” – Warren Buffett
IT’S BEEN THE asset that has held its own in recent times. Save real estate, it has actually beaten every
other investment hands down. Yet, who would have ever thought that it would do that. Yes, we are talking about gold, the mesmeric yellow metal.  

Circa 2002, when gold price was inching towards Rs 5000 levels, a colleague of mine breathlessly predicted that gold would touch Rs. 7000 in two years. 

I fancy myself as an intellectual and cannot see life beyond the prism of the stock market. So, I asked,“How?” He responded by saying, “I don’t know ‘how’ but I know it will”. Then for good measure he added, “It’s in its 28 year peak.” 

I responded, tongue firmly in cheek, “Oh it has taken 28 years to reach this level? Why get excited?” He just smiled. 

He invested in gold. I continued to play stock. He is now laughing his way to the bank. And I am writing cover stories. 

Welcome then to the world of gold, the unexpected prima donna of the last decade. It would be instructive to understand the history of the yellow metal, its date with destiny and the reasons as to why it has such a tantalising hold over people, in particular over Indians.  

It would be good to know where the demand comes from, how much is the supply and whether gold would continue its relentless march skywards. Most importantly, we also need to address the question as to whether it is good for us that gold prices go up.  

Let’s explore some ideas and explode some myths.

Golden Idea 1: Why do we date gold

India is no South Africa; we are not awash with gold mines. Yet, Indians love gold and Indians have accumulated gold. By last count this nation held 18,000 tons of gold; that, when our annual production is a piddling 2.2 tons. Yes, we are holding stock that is the equivalent of 8000 years of production. So how did it happen? Read on to some historical nuggets for insight.  

• India was a net exporter of goods for a good part of the last 2000 years. This richness enabled India to import gold.
• In those halcyon days of kings and kingdoms, a gold coin issued by one king was accepted as legal
tender by other kings as well. So gold became an important store of value.
• In times of war you could hide and carry gold with ease. So, citizens were safe from the marauding
armies. Also, in times of crisis gold could be mortgaged.
• The inheritance laws in the Mughal period favoured gold accumulation. Under the law, on a person’s
death, the estate would pass to the legal heir only at the discretion of the State. Little wonder, people
chose to hide their wealth. And there wasn’t a better route than gold.
• In Hindu weddings, gold jewellery is a major component of gifts given to the woman.

1 2 3 4 5 6 7
Author :
Reported On :
Sector :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236