Indian people hold 20,000 tonnes of gold

It may come as little surprise to those who understand the “fear trade” and the “love trade” in gold, as Frank Holmes of US Global Investors likes to say.

Last week the Economic Times reported that the Indian public hold 20,000 tonnes of the yellow metal in jewelry, coins and gold bars. It was unclear from the media report what was the source of the “20,000-tonnes” comment, but Arun Jaitley, the Indian Finance Minister, reportedly stated the figure after noting that the Indian government does not have data on gold held by the general public.

However it would mesh with a news story three years ago in The Financial Express, which said that Indian households have amassed up to 20,000 tonnes for a historic high of $1.16 trillion, based on the gold price in 2012. The figure came from the World Gold Council (WGC) which estimated that India’s household gold reserves at the time were 11 percent higher than the 18,000 tonnes it had earlier pegged.

Gold has been pouring into India since the government last November scrapped gold import restrictions, including the 80:20 rule, which required gold traders to export 20 percent of the gold that they imported. In April Reuters reported that gold imports more than doubled to 125 tonnes in March from the 60 tonnes in the year-ago period. Gold imports for the fiscal year 2014-15, which ended at the end of March, were up 36 percent to 900 tonnes.

India, the world’s top gold consumer, is in 10th position among the top 10 countries that hold the most gold in their central banks. The Reserve Bank of India holds 557.7 tonnes of the precious metal, compared to number 9, the Netherlands at 612.5 tonnes, and eighth-ranked Japan at 765.2 tonnes. The top 3 gold hoarders are the United States at 8,133.5 tonnes, Germany at 3,384.2 tonnes, and Italy at 2,451.8 tonnes, according to Profit Confidential which recently compiled a list.