In India, middle-income people are buying more gold
According to a study published on Monday, people in the middle income category buy more gold and prefer the yellow metal in its physical form. People in the higher income category are also interested in owning gold in digital or paper form, according to the India Gold Policy Center (IGPC) Gold and Gold Markets 2022 report. Per capita gold consumption is highest among the wealthy, but the total amount is still dominated by the middle class. The majority of consumption is centered on households with annual incomes of Rs 2-10 lakh, which consume 56% of the total volume, according to the survey.
The report further revealed that gold consumption was not affected by demonetization or the implementation of GST (goods and services tax). Over the past five years, at least 74% of high-income households have confirmed they have purchased gold, he added. The report also revealed that gold symbolizes celebration, and weddings and festivals contribute 65-70% of reasons to buy jewelry, while 30-35% is discretionary spending. About 43% of Indian households buy gold for weddings, 31% buy without specific occasions, he added. “Contrary to the common mentality that gold is for the wealthy, the survey showed us that middle-income households consume the most gold by value as well as volume.
Therefore, they prefer safe havens – gold and gold products or secure government products such as fixed bank deposits, public provident fund, life insurance, postal savings, among others, where the risk is minimal, he added. For a class with an annual income of more than Rs 10 lakh, who are upper middle and wealthy, the savings are gains from their additional income, extra unused money and capital gains, he said. . Therefore, they prefer to save in stocks or shares, derivatives and real estate, he added. The Household Gold Consumption report was prepared through a survey conducted by the IGPC in association with People Research on India‘s Consumer Economy (PRICE). The survey was conducted among 40,000 households.
Speaking of the factors, we must recognize that the pandemic has played a significant role in strengthening the case for gold as an asset,” said IGPC Chairman Arvind Sahay. The COVID-19 virus has exposed the fragility of global political and financial systems and the devastation caused by the outbreak has led to a sharp increase in stock market volatility, which has triggered a ripple effect, reducing liquidity market, he observed. “Gold has again emerged as a safe haven due to the diversification benefits it offers to equity portfolios,” he added.
Summary of news:
- In India, middle-income people are buying more gold
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