- Personal Finance»
- Financial Planning
Finance and goldstock
India purchases gold
The economic powers in the world were amazed last week when India purchased 200 tonnes of gold from International monetary fund(IMF).This purchase needed an investment of Rs.35,000 crores.India also announced that it is ready to purchase still more gold, if need arises.With this purchase, India reached 10th place among the top stockers of gold, in the world. It has now 557.5 tonnes of gold in its foreign exchange reserve stock.It makes 6% of its total foreign exchange stock.It could save that much forex exchange in international currency trading business.
Name of the country -Gold Stock in tonnes -% of gold in its Forex.currency reserve
1.U.S.A. 8133.5 77.4 %
2 Germany 3408.3 69.2 %
3 Italy 2451.8 66.6%
4 France 2445.1 70.6 %
5. China 1054.1 1.9%
6 Switzerland 1040. 29.1 %
7 Japan 765.2 2.3 %
8 Holland 612.5 59.6 %
9 Russia 568 .4 4.3 %
10 India 557 .7 6 %
Top ten countries in Forex reserve are the following:
1.China-with Rs.113 lakh crores($1=Es.50/-)2.Euro zone - Rs.50.9 lakhs crores
3. Russia- Rs.26.5 lakhs crores 4.Taiwan Rs.16 lakh crores
5. India Rs. 14.2 lakh crores 6 South Korea Rs Rs. 12.7 lakh crores
7 HongKong Rs. 11.65 lac crores 8 Brazil Rs.11.6 lac crore
9 Germany Rs. 9.2 lac crores 10 Singapore Rs. 9.1 lac crores
GOLD STOCK RESERVE IN THE WORLD
In the world, 108 countries have a total stock of 41,000/- tones of gold in their central banks. .Apart from this, private and institutional investors have 1,750 tonnes of gold.
Gold stock helps to store Forex and world currency exchange stock at the use of a country, at need. it is considered as best foreign exchange
Till 2006, 1,58,000/- tonnes of gold was extracted from gold mines.As one tonne gold costs about $30 crore, the approximate gold price of this extraction would be $47.4 lakh crore.
GOLD STOCK AT IMF
It IMF as at present has 3,217 tonnes of gold.The market value could be easily calaculated on the basis of value given above.
But the value of gold at IMF is not valued at market rate.There are various hurdles in its constitution to calculate it that way.Presently, the value is calculated at 1976 rate.
INDIA- EMERGING FINANCIAL POWER
once upon a time, in 1990s, India had only Forex reserve enough for just 3 weeks. Then, having no other way,India had to mortgage its gold, to pay off its loan installments.It pledged it with Bank of England, and faced bitter criticism from opposite parties in the country..
But no Now, the situation is entirely changed.It s having so much reserve and so much gold stock. From any angle, India is now a strong economic power.
Rise in Gold price in India
Rise in gold price in the world is amazing.In the paet 9 years,gold price has increased by 400%. It was Rs.4000/-per 10grams(1$=45.5 rupees as on 17-5-2010).But now it has reached Rs.18,000/per 10 grams.It is expected that,the price will cross Rs.20,000/ mark.
Banks selling gold
As in other countries,In India also, some government banks are selling gold in coin form and also in electronic form.People purchase it from banks also, as they have better reliability.
Still rising price
Now,one year after first publishing this hub, gold rate is still rising all over the world. Convincing point is that, stock market is also slowly rising since mid- January.We cannot say when the rising trend of gold stops. Perhaps, there will not be greater fall in the rate in future. Present rate level is almost permanent.
Raising tax on gold
By the end of 2012,gold price in India crossed Rs.30,000/-per 10 grams with 24 carrot purity.Indian Government is thinking of bringing down this craze for gold under control.So, it is also planning to take some measures to make Indians reduce this craze of theirs for gold. One such measure is-to raise the excise duty on the import of gold.
But that may not do great difference. Prior to 1977, there was tax on import of gold and more restrictions were there. Then Gold smuggling was much in practice. In order to get rid of that bad practice, Janata party government that ruled at center then,removed the control on import.
Increase in tax only further increases the price; nothing more can be achieved.