The Gold Rush of 2009
December 10th, 2009
November 2009 marks a new entry for the record books - we have just witnessed the largest gold purchase in history! India bought two hundred metric tons of gold from the International Monetary Fund (IMF). To help visualize the magnitude of this weight in gold, imagine 44 (yes, 44!) elephants! This US$6.7 billion sale is the largest of all time. This also marks the first time the IMF has sold gold in over 9 years. This huge purchase marks a departure from the US dollar and also highlights India’s strong cultural ties to this precious metal.
This large gold purchase illustrates the volatility of the US dollar. Gold has become a preferred investment as the dollar value fluctuates and shows signs of diminished value against other currencies. How does this make you feel about your US dollar savings account? Interested in buying some gold? Gold is valued at $1128/oz today (12/10/09), wow!
Besides being a wake-up call to the value of the US dollar and the large amounts of gold India now is holding, this news also helps to illustrate the strong feelings India has for gold. Understanding India’s relationship with gold helps to put this news in perspective.
India is the world’s largest consumer of gold. This is in part due to their religious attachment to gold. In the Hindu religion, gold is linked to the incarnation of the “Creator” Brahma. Indians also see the metal as a symbol of prosperity, purity and good fortune. There is also a strong belief that golden ornaments should be worn for specific ceremonies and occasions.
This belief is evidenced by the very ornate Indian brides. The gold purchased for a wedding typically accounts for about half of the total cost of a wedding. Gold is a form of adornment, and also is an investment that can be passed down through the generations. According to Wikipedia, India has “the longest continuous legacy of jewelry making anywhere” in the world, dating back more than 5,000 years!
Here in the US, we typically think of jewelry being in the form of earrings, necklaces, rings and bracelets. India’s plethora of adornments is almost overwhelming. Here is a list of types of accessories commonly worn by brides:
- Shringar Patti (tiara)
- Maang Tikka (smaller tiara)
- Nath (nose ring)
- Chudi (bangles)
- Hathphool (bracelet with rings)
- Anguthi (finger rings)
- Bichhua (toe ring)
- Payal (anklet)
- Mangal Sutra (necklace with black beads)
- Kamarband (waist band)
- Baaju Band (arm bands)
I don’t know about you all, but I personally look forward to seeing all of the gold creations that await us in India. It is an amazing metal that stands the test of time. I look forward to purchasing something nice for myself to serve as a reminder of our amazing journey in India…
-Catherine Kristensen
Entry Filed under: 2010 Student Blogs, India, Misc.
3 Comments Add your own
1. Jason Silver | February 1st, 2010 at 4:04 pm
The large purchase of gold by India from the IMF can be quite a shock to people who are not familiar with the ties India has with gold. Through generations of conquests, wars, and political and social change, gold has been a constant. Gold has been used as currency in India dating back thousands of years and has been used as a constant measure of wealth over that time span.
This relationship goes even deeper. The god of creation, Brahma, is said to be the one born of gold (Hiranyagarbha). Gold is used in all sorts of cultural and traditional ceremonies from weddings to births, birthdays, and even for offerings to Indian deities. It is so ingrained in Indian society that gold is sometimes willed to unborn children and to those who will be married in the future.
This purchase should not surprise most Indians, as one person puts it, “Gold to us Indians is that ultimate love object… not only does it adorn our bodies, it also acts as a good investment… Gold is ancestral”. This affinity for gold will last as long as Indian culture and tradition persists. So when you see all those “Cash 4 Gold” commercials on your TV’s, at least you can be comforted in the fact that a whole subcontinent is investing in gold as well.
2. Emily Schaapveld | February 11th, 2010 at 1:32 pm
I knew that India was the largest importer of gold, but I cannot even fathom what forty-four elephants worth of gold looks like (much less the US$6.7 billion used to pay for it!). I have always been curious as to why gold was so popular in Indian, defaulting to the fact that it probably has some sort of religious tradition. Thanks for posting such an interesting article, because now I better understand the significance of gold in India. Like you, I cannot wait to treat my self to a beautiful piece on the trip!
3. Frederick Peemoeller | March 11th, 2010 at 10:19 am
With such an adornment of gold, you have to wonder how much more will India be willing to pay to have such a precious metal. 1128 per ounce isn’t exactly chump change for anyone let alone a person in a country that has an average income of 3100 US dollars a year. Even though gold is part of their culture, prices this steep make it difficult to sustain such a desire for this metal, and it seems like these prices aren’t decreasing any time soon. With that said, I wonder if the culture will bend their views a little on gold, because it is so difficult to obtain.
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