StatsGuru: The numbers behind Indians' obsession for gold

Gold continues to be an obsession for Indians. As Table 1 shows, gold imports by weight have jumped again to the levels that helped cause current-account weakness in 2013 - although the value of the imports has not jumped proportionately.

1: GOLD IMPORTS BY WEIGHT HAVE JUMPED... 
Gold imports byweightand value 



This may be because of the falling price of the asset, shown in Table 2 - though movement of the rupee has meant that Indians don't benefit from the full pass-through of global price falls.

2: ...BUT BY VALUE IT HASN’T BECAUSE OF FALLING PRICES
Gold price in past three years



The equivalent calculations for silver are shown in Tables 3 and 4.

3: SILVER IMPORTS BY VALUE HAVE FALLEN...

 

Silver imports by weight and value 

4: ...BECAUSE OF THE FALLING PRICE OF THE COMMODITY
Silver price in pasttwo years  
 

Yet gold as an investment is not quite as appealing, according to Table 5. Had an investor bought on Akshaya Tritiya in 2012, even bank deposits, let alone stocks, would have given far better returns.

5: GOLD AS AN INVESTMENT ISN’T VERY APPEALING
Return on investments if bought on Akshaya Tritiya to date (%)  
 

Clearly, it is the material qualities of gold and not pure returns that are driving demand - as brought home by Tables 6 and 7, which show the declining values of various gold-based financial instruments.

6: VALUE OF ETFs HAS SEEN A STEADY DECLINE...
Total value ofdomestic gold exchange traded funds (Rs crore)

7: ...AS HAVE THEIR ASSETS UNDER MANAGEMENT
Assets under management of gold ETFs (Rs crore)