Why is Gold so important in Indian society? Why are Indians obsessed with gold?

As the end of the month dawns near, I cannot help but recount the numerous weddings I attended this single month. Guess what all of them had in common (apart from lavish arrangements and mouth-watering food items of course) notwithstanding the differences of culture, language or region- 'Ubiquity of Gold'. Yes you heard me right, the yellow shiny stuff was present at almost all of these celebrations in generous amounts. So much so that it made me think critically upon the above question. Is this fascination of the yellow metal bordering almost on compulsive obsession, unique to Indians in general? If yes, what could be the reasons for it?

The tradition and culture does explain a part of gold’s allure, however majority of the vast purchases today are a modern phenomenon.India consumed only 65 tonnes in the year 1982 and until 1990 imports were all but banned. However the deregulation era that followed has seen an explosion in gold purchases.

The other reason could well be, as a form of safe investment for millions of citizens, since banking system has still not reached many places, so there are few options for people to invest (mostly in remote villages). Even knowledge and awareness about investments is less hence people buy gold. Gold also serves as a rainy day fund since it is widely accepted without any documentation.

As a part of cultural ethos, it is mostly used to be given to the bride in marriage and is often equated with social status and prestige.

In a country dominated mostly by informal economy, Gold serves as an effective way to store wealth without paying tax-along with property, it is the asset class that the authorities struggle to track.

On a light note according to some past statistics, Indian households are said to have gold equivalent to the gold reserves held by the top 10 gold stocking central banks of countries such as US, Germany, Italy, France, China and India.
So what do you think on the subject? Are we Indians really big time gold-diggers? Let us know your thoughts in the comments below😀😁

Since you mentioned Indian weddings in the first post, I would like to highlight why gold is the preferred option over any other gemstone. You might have seen all the Hollywood movies and TV shows where the guy proposes with a something carat diamond ring. Diamonds rings to seal engagement are not a tradition dictated by culture but by companies, well actually one company, De Beers. De Beers noticed that diamonds were not selling as much back in the day, about a century ago. Then they decided to promote diamond rings are a grand gesture of love. They even put in advertisements which said that a diamond ring must cost your two months’ salary. Since then in western culture diamonds have become ubiquitous with engagements and weddings. Sadly they are a big waste of money as they have very little and I mean very little resale value. For example, a researcher bought a diamond ring for $6000 and then when he wanted to sell the same ring the very next day he was offered as high as $2000. This shows that diamonds are a complete waste of money. That is where Indians are smart, they invest in something that has far more resale value than diamonds and that is gold.

Gold, is not just for financial security but it also serves as a status symbol in India. People immediately judge the wedding depending upon the lavish money spent of jewellery (but that comparision always comes after the food that is served at the wedding). Gold is a rather safe resource as now certified gold can have more resale value as compared to non certified gold.

In my view, Gold is a financial, economical, social, religious and an auspicious subject. As @Satya Swaroop Dash said, Gold is considered as an investment and a status symbol in India. Many Indians don't find any difference between liquid cash and Gold. They treat both equally as a financial security. And Gold is also considered as the auspicious thing by many Indians. As many Indians are more religious in nature, We can also see some occasions like Akshaya tritiya where Indians buy Gold and do pujas for Goddess lakshmi devi.

Whole world economy was based on Gold, for economic unit, i.e. printing money. But it's no more.
However,

• Gold still remains universal scale of wealth.
• In Indian context it also serve purpose of jewelry.
• It can be kept as security loan for urgent liquid cash.

So, this common interest of keeping wealth in jewelry form is obvious. Cherry on the top, show off wealth in wedding and auspicious functions.