Weak Rupee may keep Indian farmers away from Gold

To quote Professor Jeffrey A. Franks, holding gold has in fact often in history served, from France to India, as the only way the peasant can protect himself against inflation and the vicissitudes of politics” (Dr. Y.V.Reddy, 1997)

The above quote appears in an RBI report and speaks volumes about gold consumption pattern in India.

That India celebrates gold is a well-known factor. And if this celebration is deemed a party, it is the rural India that forms the party crowd; the presence of group of middle class and High Net-worth Individuals would not be there on the dance floor!

According to some independent estimates cited in an RBI report, rural India accounts for over “65% of total gold stock in the country” which may run into 13000 tons as per some other estimates! If Indian peasants were a nation, it would have had the strongest currency in the planet as there is so much of gold to back it. Incredible, if not dizzying!

And when do these rural peasants buy gold?

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