Gold and India

Abstract

This paper documents the consumer perception of gold, triggers for purchase, the impact of gold prices and inflation, role of institutions, particularly the RBI and the impact of gold imports on financial stability of the country. The findings suggest that there is a need for a more sustainable solution that takes into account the cultural and psychological associations which Indians attach to gold. The study concludes that there is a need to tackle inflation to curb gold imports, increase the depth of financial markets through innovative instruments and close gaps in the economy leading to more investments in gold than other assets and instruments.