GIG-OS ENGLISH: Indian temples gold reserves could supply the demand for gold

Indian temples gold reserves could supply the demand for gold

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India is notorious in the gold market for the voracious appetite for gold of all the population, but gold import and demand are raising while huge sums of gold collect dust in temples. What has been the measure taken by the Indian government? Will it satisfy the demand?

Find it out!

In India gold is given traditionally as a gift and in inheritance since it is a good that, due to its limited quantity, increases its price with time. But it's this scantiness what afflicts the Indian government as there is an increasing jewelry gold demand and trade deficit of the country brought about by the high price of gold imports, which annual figures goes from 800 to 1,000 tons.

At this juncture the government has decided to launch a scheme in May to make Indian temples give away their gold reserves to deposit them in banks, of course in return for interest payments.

Through the years thousands of faithful have offered gold as a gift to deities in these temples and with time it has created real gold treasures in jewelry, bars and coins kept in security vaults.

One remarkable example is given by the Shree Siddhivinayak temple in Mumbai dedicated to Ganesha, which treasure reaches 158kg of gold worth nearly $70 million. Another secret vault underground was found some years ago, with a reserve of about $20 billion.

Still, same as the Hindu elephant-headed god would protect a goddess according to the legend, the faithful are willing to protect the gold they entrusted the temples for religious reasons. As well, this is a chore which few Hindu priests would embrace with any degree of enthusiasm, unless the interest rates for deposits are of their interest.

Yet the government hopes to clinch a deal. Just in gold imports the impact would help establish a balance in trade, and there would be more jewels to supply the demand during the main festivals and wedding season.

The ballpark figure of the gold accumulated in all temples is 3,000 tons. And if only families would offer their private reserve the figure would reach even 17,000, but it is unlikely to happen.

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