Will The Rest Of The World Follow India

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Author	Replies: 7 / Views: 1,349
rggoodie Moderator United States 23510 Posts	Posted 04/10/2009 10:26 pm The following article is from an Indian Newspaper. What are your thoughts on this? Half-gram gold coins may become a hot pick Dilip Kumar Jha / Mumbai April 11, 2009, 0:46 IST Gold is back in favour with consumers shifting their focus on the precious metal on the back of moderation in prices. And Akshaya Tritiya, falling on April 27, may provide a good opportunity for Indian consumers. But jewellers fear that retail purchasers may not go for the traditional 5-10 gm coins. To counter this, the World Gold Council (WGC), the gold sales promoting agency sponsored by miners, is planning to popularise half-gm coins. "Reducing the coin size will serve two purposes. Consumers will continue to aspire for gold but at a lower investment, thus saving money to fulfill other needs. At the same time, they can also celebrate the occasion which is auspicious for buying gold," a jeweller said. Meanwhile, WGC has lined up a number of plans to attract retail customers. The council has organised a month-long (ending on April 27) shopping festival of gold jewellery across West Bengal, Maharashtra and Gujarat to make consumer aware of the importance of this occasion. In Maharashtra, the council is planning to expanded its reach to Tier-II and III cities such as Sangli, Satara, Kolhapur and Marathwada. In Gujarat, it is planning to reach small cities and towns such as Jamnager, Bhavnagar, Navsari etc. In the South, where the festival is celebrated with much fervour, the council is planning to engage 10-15 partners for its promotional effort this year instead of 1-2 till last year. "We are promoting gold with a motto to add gold in the regular shopping portfolio of consumers and we would continue doing so irrespective of the price movement," said Ajay Mitra, MD (India sub-continent), WGC. WGC has envisaged a five-year plan where a postman could book gold orders and ensure delivery in rural parts of the country. It has also engaged saree shop-owners to offer gold jewellery items on the very next counter. "If plans are approved, per capita gold consumption in India will rise substantially from the current level of about half a gm," Mitra added. rggoodie aka Richard "catch em doing something right" Report this Post to the Staff

vermontensium Moderator United States 16679 Posts	Posted 04/10/2009 11:19 pm swcoin.ecrater.com Report this Post to the Staff
norseman012 Valued Member United States 357 Posts	Posted 04/11/2009 12:27 am please correct me if I'm wrong . what you are saying that more people in India will be able to save small amount of gold at a time and that will push the demand as well as the price of gold bullion. Report this Post to the Staff
Sap Moderator Australia 16826 Posts	Posted 04/11/2009 12:46 am Akshaya Tritiya is a Hindu holiday. According to Wikipedia: Quote: The day is particularly considered auspicious for buying long term assets like gold and silver, including ornaments made of the same; diamond and other precious stones... India does not produce any official gold coins, either collector or bullion, and has not done so since independence - the "coins" mentioned in the article must be foreign coins or privately made rounds; I suspect the latter. Half a gram is 0.016 troy ounces. The smallest bullion gold coin Australia produces is 1/20th or 0.05 ounces (about 1.5 grams). Bullion in coin form costs slightly more than spot price; as the bullion coins get smaller, this "coining premium" increases - for a 1 ounce coin, it's a 4% premium. For a 1/20th ounce coin, it's a whopping 35%. I don't think coins below 1/20th of an ounce will succeed, not in richer countries anyway, because the coining premium will be over half the coin's actual bullion value. Most people paying for bullion want their money to buy gold, not pay coining premiums. Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis Report this Post to the Staff
wd1040 Pillar of the Community United States 3098 Posts	Posted 04/11/2009 01:02 am Buy the coin, not the ~~holder~~ premium Report this Post to the Staff
DNA Pillar of the Community United States 2734 Posts	Posted 04/11/2009 5:37 pm Quote: sap: "Most people paying for bullion want their money to buy gold, not pay coining premiums." 400 oz. bars are the 'cheapest way' to buy gold (as in 'lowest premium over spot'), so why even bother with gold coins? The coining premium buys flexibility and liquidity. You can sell one ounce or less at a time, without assay. Not very many businesses or individuals can buy a 400 oz. gold bar, you know! All I have to say is: If I had a thousand of those tiny half-gram rounds and a booth at a big U.S. coin show, I'd be sold out of them by the end of the show! (if not in the first hour or two!) Report this Post to the Staff
chasinva69 Valued Member United States 259 Posts	Posted 04/11/2009 6:12 pm Indians have a long history of buying gold, wearing it, holding their life savings in gold jewelry etc. - and yet as Andrew Tobias said many yeas ago in "The Only Investment Guide You'll Ever Need," they are still among the world's poorest people so what does that tell you? Me, I have a nice car and big house I bought on credit and have almost no gold at all. So which would you rather be? Report this Post to the Staff
DNA Pillar of the Community United States 2734 Posts	Posted 04/11/2009 10:31 pm Quote: chasinva69: "what does that tell you?" That they're not living in overvalued houses bought on easy credit, which is what got us (and thus, a lot of the world) into this mess we're in now! They may be living in tin-roof shanties, but they're paid-for tin-roof shanties without adjustable-rate mortgages. Actually, India has better prospects for economic growth in the next ten years than the US or China do.... The people in India who can afford to buy any gold (even the half-gram rounds) are probably as comfortable as our middle class, or (with the current US economy) more so. They have low costs of living (a house like yours might cost less than US $10,000 there!). They have gold that's going up in value year-to-year, while your house and car are dropping in value (and you're making payments based on a higher value). I'd rather be here in the U.S. as well, but not everyone in India is as bad off as you think. The high-tech (computer) industry alone in India proves that! Edited by DNA 04/11/2009 10:32 pm Report this Post to the Staff
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