BlackRock founder and chairman Larry Fink
Anjali Sundaram | CNBC
BlackRock founder and chairman Larry Fink says India’s love affair with gold has neither benefited the economy nor delivered decent returns for investors In his annual letter to shareholders The world’s largest asset management company.
“When I visited India in November, I met policymakers who lamented their citizens’ love affair with gold. The commodity lagged the Indian stock market… Investing in gold didn’t help the country either. economy,” Fink said.
Gold can serve as a good store of value, but it cannot stimulate economic growth; when someone puts money in a bank or invests in a house, it creates a multiplier effect, thereby boosting economic activity – “But what about gold? It just sits in a safe.” Here,” he said.
India is one of the largest gold markets as the precious metal plays an important role in the country’s culture. Buying gold during weddings and festivals is often considered auspicious. It is also considered a safe investment and a symbol of wealth.
Gold investments can take many forms, including buying jewelry, exchange-traded funds, and Sovereign Gold Bond Scheme.
Fink emphasized the importance of capital markets and how they can improve a country’s economic status relative to gold, citing the role that U.S. capital markets play in the U.S. economy.
“No other force can lift more people out of poverty or improve the quality of life like capitalism. No other economic model can help us realize our highest hopes for financial freedom—whether we or our country want it,” Fenn said. K said.
India’s gold consumption has been one of the highest in the world. Data from the Reserve Bank of India showed that the Reserve Bank of India purchased 4.7 tons of gold in February, bringing its gold reserves to a record high of 817 tons. world gold council.
However, Kavita Chacko, head of India research at the World Gold Council, said the recent record highs in gold prices could hurt demand for the precious metal in India.
“Even if prices are moderate, demand is unlikely to rise significantly in the coming months as the country’s upcoming general elections (April-June) will keep a close eye on gold and cash flows,” Chacko said.
India’s love affair with gold aside, the country’s stock market has been one of the biggest gainers in the Asia-Pacific region, and major institutional investors are optimistic about Indian stocks, which have hit record highs several times this year.
—CNBC’s Li Yingshan contributed to this report.
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