In India even the Post Office sells gold coins

As a cheaper option for holding gold jewellery as an investment, Indian consumers are being sold small gold coins and bars through major marketing campaigns by the banks and even by India Post.

LONDON - 

In a scheme which has now been running for a full year, the Indian Post Office has been a conduit for the sale of specially minted gold coins.  The scheme appears to have been promulgated by the World Gold Council and was put out to tender by the India Post, with the contract won by Reliance Money Limited, a division of Reliance Capital, one of India's largest financial services companies.

In an information document submitted to postmasters in the Post Offices selected to sell the gold coins it says that the coins are being sold in popular denominations - namely 0.5 g, 1g, 5g and 8g of 24 ct.,99.99% pure gold.  Its gold coins are minted by independent refiner Valcambi SA in Switzerland and it has the benefits of internationally recognized certification, low risk of duplication,quality packaging, product standardisation, numbering, assayer certificate, etc.  The special ‘coins' carry the India Post logo and are this in effect equivalent to selling small gold bars.

India Post points out that the Indian Economy is one of the fastest growing economies of the world., with per capita income rising consistently. Purchasing of gold, it points out, is an age-old tradition and even religious too.

Reports suggest that the selling of gold through an outlet like India Post has been very successful.  It has concentrated on small denominations and has provided traditional buyers of gold jewellery for investment purposes with a cheaper alternative as the fabrication premiums for the coins are far smaller than for jewellery.

In this respect, India Post is competing with the Indian banks, many of which have similar gold sale schemes for their own specially minted gold coinage - mostly of coins specially produced by Swiss independent refiners PAMP or Valcambi.  The Bank of Baroda for example sells 24 Karat 999.9 pure Swiss made gold coins with Assay Certification in the denomination of 2, 4, 5 & 8 grams in round shape and 10 gram bars. 

The HDFC Bank is currently actively marketing its own small-sized Mudra gold bars for investment purposes - and even has a heart-shaped 2.5 g version aimed at the Indian wedding market and also rolled out ahead of Valentine's Day!  It describes its "Mudra as a 24 Carat, 99.99% pure gold bar that you can purchase for investment or gifting." 

"Gold continues to be one asset that appreciates steadily" says the HDFC Bank in its marketing material. "Mudra is great value for money." It goes on "These 24 K Gold Bars are made in Switzerland and come with an Assay certification, signifying the highest level of purity as per international standards.

Mudra Gold Bars are currently available in 2.5, 5 g, 10 g, 20g and 50 g denominations. The Gold Bars are presented in tamper-proof certicard packs. The bars are priced based on the daily prices in the international bullion market.

Stae-owned Bank of India is also marketing a range of gold coins:  In this case in in 4 g, 5 g, 8 g, 10 g, 20 g and 50 g.  As with the HDFC Bank, the coins are being heavily marketed to the public.  "Gold continues to be one asset that appreciates steadily. Bank of India now offers Pure Gold Coins imported from Switzerland with an Assay certification, signifying the highest level of purity as per international standards. Gold Coins are great value for money. These 24 K Gold Coins are made in Switzerland and come with an Assay certification, signifying the highest level of purity as per international standards." says the Bank.  The coins are available at over 2200 Bank branches across the country.

Most other Indian banks have similar schemes being pushed out to market small denomination coins and bars.

Recent reports also suggest that HDFC bank is looking at selling silver too in a similar manner.

So it is not only Chinese state institutions which are promoting the sale of precious metals as an investment, but Indian ones too, meaning the world's two largest consumers of precious metals both have ongoing marketing in place to persuade investors to buy bullion. 

What this will mean for the gold market is as yet uncertain.  In India much of the marketing seems to be aimed at persuading the small investor to buy the certified coins and bars rather than jewellery so it may not have a huge impact on the overall market, at least initially.  But the fact that such marketing programmes are in place mean that the Indian public, already attuned to the idea of gold as being a worthwhile investment just have another persuader out there to get them to enter it, which should be positive for gold demand in a nation where gold investors are only just getting to grips with the higher gold price levels.

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responses to this article

Excelent idea! I hope we could have some day that posibility to buy "post gold" here in México, for now we only have the posibility to open bank acounts to vault Libertad silver onces, but gold only can get by jewerryl or Centenario gold coins. by Germán H. on October 20 2009, 13:36 Find this comment inappropriate? Report it

Here in Canada... Too bad the only gold coins you'll find offered at Canada Post outlets are "collectables" that sell for 2-3 times the price of the gold. I've never seen the basic "Maple Leaf" gold or silver bullion coins in their display case. . .more Ironically Canada Post does transport my orders from Kitco so I end up picking them up at the Post Office. . .less by PO Box tenant on October 22 2009, 01:54 Find this comment inappropriate? Report it

Banks and Post Offices Selling Gold My only hope, for the people of China and India, is that these coins and small bars contain the exact amount of gold claimed. It would be shameful for governments to steal from their own countrymen when they are trying to protect themselves against . .more theft via paper money. . .less by Edward Ulysses Cate on October 22 2009, 16:19 Find this comment inappropriate? Report it

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