Interesting article in FT about Indian households pulling back from gold. A sign of things to come?
Indian households traditionally use gold as a haven from fluctuations in the market, to hedge against inflation, and other macro risks. As the article points out, gold is the second most preferred investment (after bank accounts). Nine percent of the global stock is held in India.
Aside from the investment aspects of the commodity, the consumption of gold in Indian society is significant. Weddings (regardless of household wealth) often mean the substantial purchase of large amounts of gold.
Are Indian households predicting the present-high of gold is soon coming to an end? Has anyone come across studies which examine the effect of gold prices on savings and investment?
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