Statistics suggest roughly four and a half million Indians live in the United States. Not American Indians/Native Americans, but those from India or of Indian descent. This year, we even have Indian candidates in the presidential election including Nikki Haley, Hirsh Vardhan Singh and Vivek Ramaswamy....
Ramaswamy is getting the most press. He is a billionaire with notable numbers. Admittedly, these days it takes every bit of a billion dollars to be a presidential contender. Ramaswamy is in good company in India. Currently, over 165 people in India are classified as billionaires. That’s the third most in the world. Second is China with 495 billionaires (primarily in Hong Kong). On the high net worth individual (HNWI) spectrum, the US leads with 795 billionaires. The US also leads the world in millionaires with 22 million.
Given the healthy financial profile of China and India, it’s not surprising those two countries also lead the world in the consumption of gold. “Consumption” may be misleading. After all, you can’t eat, drink or live in gold.
Ever since its discovery in Nubia, Egypt around 2400 BC, people have mined for, panned for and killed for gold over most everything else. It was gold that was used to bribe border guards in Germany during World War II. It’s still the golden ticket of freedom for people fleeing North Korea or tyrannical regimes in other parts of the world. As such, those owning gold often keep it discreetly under wraps so as to not attract attention.
The opposite can be true, especially in one aforementioned country. In India, it is common to showcase as much gold as possible, usually in the form of opulent jewelry. Those of means wear layers of necklaces, rings, bracelets and ornamental headpieces worth tens or hundreds of thousands of dollars.
Of course, even with its glut of people of means, much of India’s population is in poverty. Some 60 percent live on under three dollars a day. Even so, the poorest in India do whatever is possible to acquire some gold – no matter how small an amount.
Those who can’t afford much often buy amounts as tiny as one-half a gram. Given there are 31 grams in just one Troy ounce, that’s a very tiny item. But, not the smallest of all time. That prize goes to a coin known as a Bele of Vijayanagara. Minted over 500 years ago in southern India, the bele weighs a microscopic .75 grains. Not much larger than a good-sized grain of sand, it would take over 600 of the tiny coins to equal one ounce.
The downside of buying very small gold bars or coins is the premium charged. For instance, in the US, the smallest coins now available are the 1/10th ounce gold American Eagles. At the current gold price of $1,920 per ounce, a one-ounce gold Eagle retails for about $2,000. Dealers will buy them for about $1,950 so the buy/sell spread is reasonable. The 1/10th-ounce Eagle now costs $233 each, which converts to $2,330 per ounce.
Other countries also produce interesting gold coins in a variety of sizes for collectors or investors. Great Britain, Canada, South Africa and China lead the pack in attractive gold coins. So too for Australia. Against the US Eagle, Canadian Maple Leaf and Chinese Panda, Australia mints the popular “Kangaroo” gold coin. It comes in traditional one-, 1/2-, 1/4, and 1/10-ounce sizes, but also a smaller 1/20th-ounce version. Again, the smaller the size, the greater the premium paid for the coin.
For some years, the Perth Mint in Australia has released a super-small, one-half gram Kangaroo gold coin with a face value of two-dollars. It’s called the mini-Roo. At barely 11 millimeters wide, under magnification you can see it contains a nicely engraved image of a kangaroo on one side and Queen Elizabeth II on the other. No, not King Charles just yet.
The tiny mini-Roo coins sell for about $75 apiece. That’s certainly affordable. However, because it would take over 62 of the micro coins to equal one ounce, the spot price of gold would have to more than double to $4,600 to even break even.
As legendary financier and fan-of-gold J.P. Morgan once stated to Congress in 1912, “Gold is money…everything else is just credit.” Maybe so. The question is, at what price? Clearly, as investors of means realize, the larger the coin or bar, the better the deal.
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