India coronavirus: Gold rush as pandemic roils country’s economy

India coronavirus: Gold rush as pandemic roils country’s economy

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Gold prices have been rising, making it a reliable and popular asset









Indians are returning to one of their oldest assets amid a raging pandemic that was preceded by a banking crisis, reports the BBC's Nidhi Rai.

To say Indians love gold would be an understatement. Over centuries, households - as well as temples - have hoarded the precious metal.

According to a World Gold Council estimate from last year, total gold reserves across Indian homes were about 25,000 tonnes - the largest in any country.

This time-tested investment has regained popularity as India's economy reels from the devastating effects of a global pandemic. When Covid-19 struck, India's $2.5tn (£1.9tn) economy was already sputtering because of a banking crisis.

One of the results has been a liquidity crunch, which has prompted many Indians to turn to gold as both investment and collateral.

And they are increasingly using it to raise funds, says commodity market expert Kunal Shah.

At a time when traditional bank loans are harder to come by, a hike in gold prices has helped fuel the popularity of these loans.

Gold prices surged 28%