Gold represents less than one per cent of total global investment assets, notwithstanding the rising demand around the world and bullish run for the metal in the recent weeks.
World Gold Council Managing Director (India and Middle East) Ajay Mitra, in a telephonic interview, said “this means that the market opportunity for growth in gold investment is still significant.” Even as the yellow metal touched the peak price of Rs.19,050 in Delhi on Tuesday and hovered at Rs.19,010 on Thursday, Mr. Mitra said “We do not yet have the right kind of products to attract more investments into gold.”
In the wake of ongoing economic uncertainty, first triggered by the sub-prime crisis in the U.S. in 2008 to the latest economic crisis in Greece with an adverse impact on Eurozone countries, the unique role of gold as the ultimate hard currency and preserver of wealth had come into focus as never before, he said. The fundamentals of rising demand, constrained mine production and a shift in behaviour by central banks, with the latter becoming net buyers of gold support the trend.
In this context, gold's diversification qualities and its ability to mitigate macro risks had led to renewed strength in investment demand across the board for gold. But there was need to innovate and bring new differentiated products to tap the investors' mood, he said. The WGC employed a focus team to look into this aspect and a proposal to introduce gold accumulation plan on the lines of systematic investment plan, was on the anvil, Mr. Mitra said. Though some jewellery shops were offering such schemes, a scheme introduced by the WGC would carry credibility and offer the consumers the best average price even in a volatile market. “We will bring it to India soon,” he said.
Efforts are also on to bring insurance angle to gold investments. At present the RBI looks at gold as a commodity. But plans are under way to treat gold as an asset with insurance linked plan as part of portfolio diversification.
Mr. Mitra said India was one of the key gold markets in the ongoing growth in gold demand.
