India's love affair with gold

It's so small, it comes in credit card sized packaging. At $60 a gram, it takes months to earn one.

Pitts: Talking about gold makes you smile. You were so serious inside. But you talk about gold, you smile.

Beela Babu (translation): I earn this gold through my own hard work. That makes me happy.

Ajay Mitra: India has close to 400 million population that is classified as the poorest of the poor.

Ajay Mitra's employer - the World Gold Council - is funded by a group of mining companies to promote the sale of gold. He created the program to help India's poor, not to mention the gold industry.

Pitts: How would you characterize the role that India plays in the price of gold?

Mitra: The demand for gold out of India is fundamental for the health of the industry. If India sneezes, the gold industry will catch cold.

Pitts: People in the West can think what they want. The folks in London can set prices as much as they want. What happens in India is what determines what happens with gold.

Mitra: Right.

For now, much of India's demand for gold can be found in high-end stores like Anmol, owned by Ishu Datwani.

Ishu Datwani: This is the lower end of the spectrum. This starts--

Pitts: Lower end?

Datwani: --at about $500. This is a chain from Italy. Yes.

Pitts: You wouldn't wear that to a wedding.

Datwani: You wouldn't wear that to a wedding, no. You wouldn't. You wouldn't be caught dead with it in a wedding. This is about $30,000.

Pitts: $30,000?

Datwani: $30,000 yes.

Pitts: And people are coming in and buying that?

Datwani: Yes.

With India a rising economic powerhouse, the number of rich and middle class families now outnumber the poor. Indian households save an estimated 30 percent of their income, compared to about five percent for American households. The combination of rising incomes and savings prowess will enable Indians to buy more gold.

Pitts: How can you be both frugal and conservative, but yet be willing to spend thousands of dollars on gold?

Datwani: Because in your mind, that is a saving. That is going toward your saving account. You're not-- you know, a lot of people, when they come and buy gold, they don't think they're spending money. It's not an expense. It's an investment.

Pitts: That sounds like a jeweler's dream to have customers think they're not spending money.

Datwani: They do. They do. I'm not-- those are not my words.

Agarwal: In India, it's the jewelry that needs to do the talking. You know?

Chauhan: Nothing else matters.

Agarwal: ... because if you're not all decked up in your jewelry, you're just not sending the right message to the world.

Pitts: Yeah, 'cause all--

Chauhan: It has to be loud and clear.

Pitts: Loud and clear.

Chauhan: Yes. "There's gold on me." That's about it. It has-- it can't be understated. You have gold, flaunt it, show it.

Agarwal: Wear it.

Chauhan: Wear it.

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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.