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World Gold Council

Topics Covered: Important International institutions, agencies and fora, their structure, mandate.

World Gold Council:


Context:

As per WGC, Gold demand in India hit a 25-year low at 446.4 tonnes in 2020, compared with 690.4 tonnes in 2019 due to the COVID-19 induced lockdown and on account of record high prices.

Gold & Economy:

As Currency: Gold was used as the world reserve currency up through most of the 20th century. The United States used the gold standard until 1971.

As a hedge against inflation: The demand for gold increases during inflationary times due to its inherent value and limited supply. As it cannot be diluted, gold is able to retain value much better than other forms of currency.

Strength of Currency: When a country imports more than it exports, the value of its currency will decline. On the other hand, the value of its currency will increase when a country is a net exporter. Thus, a country that exports gold or has access to gold reserves will see an increase in the strength of its currency when gold prices increase, since this increases the value of the country’s total exports.

About World Gold Council:

  • It is the market development organisation for the gold industry.
  • It works across all parts of the industry, from gold mining to investment, and their aim is to stimulate and sustain demand for gold.
  • It is an association whose members comprise the world’s leading gold mining companies.
  • It helps to support its members to mine in a responsible way and developed the Conflict Free Gold Standard.
  • Headquartered in the UK, they have offices in India, China, Singapore, Japan and the United States.

InstaLinks:

Prelims Link:

  1. Gold imports and exports.
  2. About WGC.
  3. India’s gold consumption.
  4. Major gold producing sites in India.

Sources: the Hindu.