Gold remains the best investment avenue for most Indian households, according to a recent study.
Indians have a deep-rooted affinity for gold regardless of their wealth. A recent survey conducted by the India Gold Policy Centre (IGPC) at IIM Ahmedabad (IIM-A) in collaboration with PRICE, a research center, found that on average, 18% of an Indian household's total investment is in gold.
The study covered over 43,000 households from various regions, income groups, and educational levels in India. It revealed that the top 20% of high-income households invest 21% of their portfolio in gold, while the bottom 20% invest 16%. Surprisingly, despite having access to other financial products, even affluent families prefer gold-based products.
The research also noted that gold jewelry is the most favored form of investment, representing more than half (52%) of the total gold investment. This was followed by gold coins and bars (18%) and digital gold (13%). The study highlighted reasons for purchasing gold, including its perceived high status, financial security, traditional significance, and value for money.
The IGPC governing committee includes notable individuals such as IIM-A director Prof. Bharat Bhaskar, IGPC chairperson Prof. Sundaravalli Narayanaswami, and World Gold Council India MD PR Somasundaram. The survey also indicated that the average physical gold investment increases with the level of education. Those with no formal education had about 10% of gold holdings, compared to graduates and postgraduates who had 16% and 21% respectively.
Notably, the research revealed that reliance on the jeweler's assessment of gold purity is common, with 46% of respondents doing so. Only 27% were aware of the Hallmark symbol, while 7% relied on government certification. Surprisingly, there was no clear correlation between the level of education and awareness about hallmarking. For instance, 5.5% of those with postgraduate degrees invested in non-physical gold products compared to 0.9% and 2.4% for those with primary/secondary and graduate education respectively.
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