Finance Minister Wants India To Get Over Its Gold Bug

Indians love gold and the country’s Finance Minister, Pranab Mukherjee, wants to inoculate the locals from the bug.

India’s gold imports rose to $62 billion in last fiscal quarter, most of it due to local demand for gold investments and jewelry. But the precious metal has been as volatile as stocks, hardly a safe haven asset for investors. For example, the SPDR Gold (GLD) exchange traded fund is down 2.15 percent over the last three months. Mukherjee said during a Zee TV award function that he regretted people were investing in gold with the expectation that the value of their investment would not lose value.

“The quantum import of gold…is a clear indication (that) large sections of the community want to investment in an asset with expectations that the value would appreciate,” he said. “The time is right to motivate our educated upper middle class to climb from saving mode to wealth generation mode. My request to financial analysts and other experts and leaders in this field is to ensure than we can create confidence in the markets, spread financial literacy and the merits of investing,” The Economic Times quoted him saying on Saturday.