India's central bank just bought 200 tons of gold! Do you know why India bought the gold?
by 
Ed the Jetpacking Headbanger
ANSWERS: 6
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Hedge against inflation. - Also, Indians are into jewelry. If you watch their movies, the stars are wearing a lot of gold.
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India is the world's largest private gold consumer, but the government's holding of the asset has been quite modest. With, this latest purchase, India is now at the tenth spot on the list of the top gold holding countries.
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Any country needs financial reserves. Those reserves may be in the currency of other countries, or in gold. The choice of which is determined in part by anticipated needs, but in part by which is expected best to keep its value. The Indian Reserve Bank obviously believes that gold is, at this moment, a good way to store its reserves.
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Buying gold is what you do when faced with destabilized world currencies. It will rise and fall, but overall it holds its value over time. As an example, the U.S. dollar in particular is a terrible currency at the moment. We are printing huge sums of money and buying our own bonds with it. Our economy is in shambles and our debt is through the roof. This is not a good time to buy dollars.
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Because they LIKE gold.
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My dad also bought gold and silver coins. He says the way the things are going, dollars will be worthless real soon.
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