One of the defining characteristics of traditional Indian culture is a strong affinity for gold. No other country "consumes" (i.e. buys) as much gold each year as India does, although China has become a closer rival in recent years.
Thus the world's two most populous countries are also the two largest importers of gold. However, in both cases, this demand is mainly satisfied by bullion bars and jewelry, not coins.
In India's case, gold coins are more commonly used as special religious offerings, which has led to some interesting circumstances.
Temple Opens Its Treasury
Tirumala Tirupati is the most "well-capitalized" temple in all of India. It earned this distinction by virtue of its massive stockpile of gold donations made by the public as sacred offerings.
By estimates in the Indian press, as much as 60 metric tons are sitting within the temple's walls, mainly from foreign countries. That's equal to over 1.9 million troy ounces of gold.
Most of the coins are American or British, but about 8 tons of the total come from Malaysia.
Donations of gold to temples is a tradition within India. However, that hasn't stopped the government from attempting to monetize all of that idle gold.
Coins that are offered as an act of religious devotion are considered sacred. This makes the effort to put any of these temples' gold to use much more complicated due to the sensitivity of the subject.
To illustrate this point, consider that another of India's richest temples recently rejected government overtures to keep their donated gold coins in a museum. The temple's leadership claims that these treasures are not intended for public display. Although the coins and ornaments are valuable cultural artifacts worthy of study, this real-world purpose conflicts with their ceremonial value to devotees.
As of now, the plan for Tirumala Tirupati's gold is to distribute the coins (in small portions of about $20 each) to any interested religious adherents. The coins will be kept in ceremonial cloth purses. Buyers will only have to cover shipping costs.
This story dovetails with a broader trend in India of a growing black market for gold. Imaginative gold smuggling in the country is on the rise again in response to a slew of government restrictions and taxes on gold ownership.
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