It is the Indian “deep cultural affinity” for gold that is at the root of this crisis, says the trade association Assocham in its report titled “India’s Gold Rush”. “The traditional gold consumers are southern peasants buying jewellery,” says The Economist. “The fundamental reasons for buying gold jewellery … are rooted in Indian culture and weddings,” says the World Gold Council, a trade body of gold producers.
“I wish all this was true,” says Ajit Balakrishnan, the author of The Wave Rider. “If it was the Indian peasant who was doing all this buying, India’s peasants would rival Arab sheikhs in wealth by now. Gold prices rose fourfold in the decade ending 2012 and threefold in the last three years alone, which means Indian peasants would have added $30-40 billion to their wealth.” Read More