February 22, 2006


Gold sales hit record as India piles up the jewellery (Tom Bawden, 2/23/06, Times of London)

GOLD sales soared to a record $53.6 billion (£30.7 billion) last year as a weak dollar, concern about terrorism and rapid expansion in India diverted investment away from shares and bonds.

The rise was revealed two weeks after Alan Greenspan blamed terrorism for pushing the price of gold beyond its underlying strength as a commodity, in his first private sector speech since stepping down as chairman of the US Federal Reserve.

Jewellery accounts for about three quarters of gold sales and last year’s rise in total gold revenues was driven by a 25 per cent increase in sales relating to Indian jewellery.

India now accounts for 23 per cent of global “consumer” gold sales — jewellery, medals, bars and investment funds — by volume, followed by America at 12 per cent.

Gold is used extensively in India, where it is seen as an important adornment for women as well as being a status symbol. Growth in India’s economy in the past 13 years has created a vast, relatively wealthy middle class increasingly keen to spend its extra income on gold as its rising price boosts its appeal as an investment.

Posted by Orrin Judd at February 22, 2006 10:55 PM

"Jewellery accounts for about three quarters of gold sales"

The other 25% goes to Paul Krugman. whose storing it under his mattress in preparation for the inevitable crash of the Bushco economy.

Posted by: Jim in Chicago at February 23, 2006 12:09 AM

"There's never been a better time to buy gold . . . ."

Posted by: Mike Morley at February 23, 2006 6:32 AM

Mike: If there's one thing talk radio has taught me, it's that it is always a great time to buy gold but I have to act quickly because I'm always in danger of missing out.

[I think I might be stealing this from someone, but as I can't remember who, I'm going to pass it off as my own.]

Posted by: David Cohen at February 23, 2006 8:30 AM

Gold is an old world hedge against disaster. My parents' generation of immigrants found having gold coins and jewelry in their safe deposit boxes gave them a feeling of security. I'm not sure if more recent immigrants don't share that feeling.

We here in the new world understand that it is our people who are our treasure, not a bunch of golden trinkets in a box at the bank. Well, our people and our inventment portfolios.

Posted by: erp at February 23, 2006 8:43 AM

India enters the 21st Century version of the Guilded Age, or, to make it more domestic, their own equivalent of Texas during the 1970s-early 80s oil boom (they had a gold-plated Delorean parked in the lobby of a bank in Snyder, Texas, near where OJ was laboring with his oilfield crew back in those high-flying days).

Posted by: John at February 23, 2006 9:55 AM

most western governments have been quietly dumping their gold reserves for a number of years. gold's only value is as jewlery. i think there was even a twilight zone episode along these lines.

Posted by: toe at February 23, 2006 2:49 PM

My first introduction to talk radio was in the early 1970s, as a teenager in Pittsburgh, listening to KDKA. One night, I heard a guest carefully explain the need for gold, the Illuminati, the Council on Foreign Relations, the Bilderburgers, the Federal Reserve, and so on. I was absorbed (for about a week).

But that's the way much of talk radio goes.

Posted by: jim hamlen at February 24, 2006 2:35 AM