Since several centuries, India is the largest consumer of Gold in the world. No other country in the world consumes this much gold every year and that’s why the Gold Bullion market price depends highly on the demand from India. According to the data, Following are the countries which hold the highest gold in the world.
The world leader in gold reserves is United States with 8,133 tonnes as on September 2008.
Germany has the second highest gold reserves at 3,412.6 tonnes.
France has 2,508 tonnes.
Italy has 2451.8 tonnes.
China is now the fifth biggest holder of gold reserves with 1054 tonnes.
Switzerland has 1,040 tonnes.
India, which many perceive as being a country with a lot of gold reserves, is actually way down at 14th position with gold reserves of 357.7 tonnes. The Indians prefer to wear their gold, rather than store it in vaults.
Gold is considered as a form of Wealth. Since centuries, people accumulate their wealth in this form. But in the modern world, because of the complexity of the financial markets, there are several other ways to preserve and accumulate your wealth. And in the Information age (After 1990), people have started preserving their wealth in the Digital Assets such as Domain Names, Websites, Blogs, Forums and other form of Online Properties
The price of Gold in the Bullion market is largely dependent on the demand from India. If the demand from India reduces, the price of this precious metal goes down and if the demand from India rises than the price of gold rises.
The other factor which drives the price of gold is US Dollar. This is because US Dollar is world’s reserve currency. And after 1971, US Dollar is no longer backed by Gold. So whenever the US Federal Reserve prints more money and push it into the circulation, it dilutes the purchasing power of the existing dollars in the economy. Which drives the Gold prices Up and vice versa.
Gold provides stability to your portfolio in the down market.
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