India's love affair with gold

Pitts: Where does India rank in the world stage as it relates to gold?

Gargi Shah: Today is-- India's position is at number one, both in consumption of jewelry as well as physical bars and coins.

In recent years, India's demand for gold accounted for 32 percent of the world's gold market. That's four times the demand in all of North America. Almost all of India's gold is imported. Indian mines produce less than one percent of the world's supply. And the rising price of gold over the past decade sent Indians rushing to buy more before prices went even higher.

Pitts: Most Indians believe that the value of gold will keep increasing.

Shah: Indeed. And that has--

Pitts: But the reality is it can't, right? At some point it will slow down, it will stop, it will, God forbid, lose some value, yes?

Shah: Try explaining that to an Indian. It's impossible to tell an Indian consumer that the gold prices will fall tomorrow because there is such a strong belief, and this belief has been backed by its own performance.

Chauhan: You're dealing with tradition. You're dealing with culture. You're dealing with history.

Chauhan: And you have to also understand that, unlike diamonds and platinum, which are much more expensive than gold, gold is considered sacred here.

The Bavikatte wedding was a Hindu ceremony, the religion for 80 percent of Indians. The bride and groom had gold on them and all around them a powerful symbol of purity and eternity that Hindus elevate to the status of a goddess. They call her Lakshmi. Every fall there's a religious holiday, one day when Hindus worship Lakshmi by shopping for gold.

Chauhan: That day, if you buy gold, it's considered to bring you prosperity, good luck, health, wealth, everything. If you buy gold a day before, you get nothing. You buy gold a day after, you get nothing.

Pitts: So you don't just buy it, you buy it on a particular--

Chauhan: Day.

Pitts: And that's the way it is.

Chauhan: Yes.

Pitts: Don't question that.

Chauhan: We have never questioned it. We just know if you buy gold today it'll bring you prosperity. Goddess Lakshmi will visit your house. So hey, let's do it. Who doesn't want to be prosperous?

India's love affair with gold started in ancient ports like Vizhinjam. For centuries, traders from the empires of Europe, Asia and the Middle East landed here, looking for spices and silk. They had little to offer in exchange, so the Indians took their gold.

Gold is so important to the lives of Indians, the poor can now get financing for it. Beela Babu and 13 other women run a small business. Every week they collect part of their hard earned money - about five dollars apiece - in a pilot program that lets them buy gold, one gram at a time.

Pitts: How many of these do you have so far?

Beela Babu (translation): One.

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[HarloweThrombey]

All that gold is gaudy. Even gross. The humans and the weddings itself look like they'd be far more beautiful with everything currently there. Except the gold.

[musicollector]

Fabulous job, Byron! I was tremendously surprised and thrilled to see that Byron visited Tumkur, my hometown! As the familiar, iconic monkey statue flashed by on the screen, I knew where that was in an instant! In fact, I lived close by during my childhood!! I could not believe that out of all the towns and cities in India, Tumkur was chosen to be on this prestigious program! The rest of the story was also quite accurate. I am placing a link to this feature at my web site. Thank you, Byron!

[nohater]

who doesn't like, love gold? it can buy you anything, give you power, you can be a king maker and so much more. the price of gold has skyrocketed, think so, to just a little under 1600 dollars an ounce! plenty of gold gives you power over so much. who doesn't like gold or better yet who doesn't want gold and plenty of it?

[hypnotoad72]

Most kings and other power figures, throughout history, eventually ended up being hated because they got greedy... or did our forefathers who battled King George were merely envious because of how successful George was? (I've read that envy excuse before so I thought I'd apply it to a similar situation via a historical context...)

[hypnotoad72]

P.S. Not everybody has the same mindset as you. Some people don't care for power, but the powerful might not want others to be so... free...

[obtainiumart]

is there ever any concern about being mugged with all that gold on your person?

[musicollector]

Occasionally, muggings do happen, not surprisingly for a country of 1.2 billion, but I have never witnessed one in all my years there.

[obtainiumart]

is there ever any concern with being mugged because you are waring all this gold?

[pierrecnet1]

I hate this cast, show-based, superficial, pecuniary aspect of the Indian culture. Some people who have money like to label people and put people in their place. SAD! PUERILE! DYSFUNCTIONAL! These people need to grow up. They justify their sad expectations citing their religion because it suits them! I feel the same way about any wealthy people of any nationality who like to show off their status.

[hypnotoad72]

Agreed.

Flaunting it is a childish thing to do and shows a sense of entitlement...

[maiingan]

The other side of India's rapacious fixation on gold isn't just the Indians who are too poor to buy much gold. It's also the harm done to the environment in many places where the gold that goes to India is mined. It's also the harm, sometimes fatal, done to many poor miners working at dangerous and often illegal gold mining in their desperate efforts to just survive. Finally, it's in the mouths of many people in countries including the USA: people who don't have dental insurance and whose income is too low for them to be able to pay for the gold crowns on their teeth that they need. According to this story, the price of gold wouldn't be jacked up so high if Indians would invest their savings into something a bit more fungible and with less practical utility than gold, like money.