An average Indian household spends 8% of their income on gold jewellery and coins according to the World Gold Council latest report. The survey reported 77% of respondents purchased gold on at least one occasion in 2013 and more than 50% bought more gold last year than the previous year.

The Indian government blames the high level of gold purchases for the country current account deficit. In second quarter the deficit widened to $10.1 billion.

This report recommends India establishes gold bourse designed on the Shanghai Gold Exchange to ensure transparency, stable pricing and greater demand supply analysis. The report also recommends the Indians need to improve refinery standards and allow domestic banks to include gold in their liquidity reserves. The report concludes India’s appetite for gold is set to continue and the country needs to design and implement an efficient gold policy.

India is the world’s second largest consumer of gold and last year consumed 850-900 metric tonnes. Gold is centre in Indian culture as is often given as gifts at wedding, birthdays and religious festivals.