Gold coin sales boom for India's post office
India's Postal Service has sold more than a half-tonne of gold coins in the last two years, a sign the yellow metal is gaining acceptance as a form of investment in the world's biggest gold-consuming nation.
India is traditionally a buyer of gold jewellery -- a common gift during religious events and weddings -- but consumers are becoming increasingly aware of the benefits of holding gold in other forms like coins, bars, and via exchange traded funds.
The sale of gold coins via the post office began in October 2008, and the coins are now available in 700 post offices throughout the country, the Ministry of Communications and Telecommunications said. "India Post is overwhelmed by the response received from the public," the ministry said in a statement released on Thursday.
The country is in the peak of the festival season, when consumers buy gold to invoke prosperity. Gold sales have rebounded with a record world price after a sharp decline last year, as the worst drought in nearly four decades dented sales.
The World Gold Council (WGC) expects 2010 imports to breach the 800 tonne-mark, surpassing the record 770 tonnes of imports seen in 2007. "They (investors and consumers) now want safety towards inflation, to protect wealth and also think about returns...so gold is the best available option," said Ajay Mitra, managing director of the WGC, told Reuters in a recent interview.
Gold is a regulated sector in India and the federal government has allowed 23 state and private banks to trade in bullion at the wholesale and retail levels.
Banks, jewelers and post offices also sell coins and bars through their retail outlets.
Courtesy: The Economic Times, dated 06.11.2010
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