How to Put Idle Gold to Use?

For Indians, gold is an addiction persisting through ages. Though the country holds limited natural reserves of gold, the ancient Indians managed to get it through international trade. The glitter of the yellow metal thus got to the heart of the Indians.

Even now, gold is an important item every household in the country aspires to hold. It can be seen in the demand projections made by the World Gold Council (WGC) for India. According to WGC, by 2020, the Indian gold demand would be 850-950 tonnes per annum. Already, Indians hold around 24000 tonnes of gold with them. Making us the largest hoarders of gold in the world.

Of this, majority of the gold remains idle and unproductive in the form of jewellery. This can be put to productive use through Cash For Gold services. These services help in solving many of the economic problems of the country. Here are some problems that can be solved.

#1 Current Account Deficit

Current account indicates the balance of trade. That is the goods and services exported minus the imports. For India, it is in the deficit. It means loss of precious foreign exchange in the form of payments to imports. One of the major contributing factor for this is the import of large quantities of gold every year.

The current account deficit can be reduced if the gold that is lying idle is put to use. The cash for gold services are essentially recycling of old gold. If people start to utilise these services properly, the need for importing gold reduces and thereby the loss of foreign exchange can be curtailed.

#2 Cash in Hands

Cash is necessary for everyday purchases. Gold is a better liquidity option. Through cash for gold service you can immediately liquify your gold into cash. With enough cash on the hands there will be rise in consumption and savings in the economy which further helps boost the growth of the economy.

#3 Gold Industry

When people start selling their idle gold, it helps the gold industry to reduce their costs of operations by reducing the need to import gold. Also, the gold industry might help boost the economy by increasing exports of gold jewellery and generating employment.

#4 Industrial Use

Apart from using gold as ornaments and investment instrument, it is used across industrial applications, especially in electronics. The manufacturing of these items becomes cost effective if the domestic gold is used.

#5 Central Bank Reserves

Central Banks world over hold huge quantities of gold as a hedge against any volatility in the global currency market. They generally do it by buying gold from gold producing countries. When the gold held by households come into productive use, the central bank can shore up its reserve by purchasing gold from the domestic market.

This shows that there is better way to use our idle gold than hoarding it. If you know more ways to utilise idle gold, please share with us Gold World.