Wolfgang Bergthaler

In 1967, Indira Gandhi appealed to Indians: “Don’t buy Gold.” The reason was that India’s foreign exchange position was under stress, imports were becoming difficult, and the currency system needed people to show “national discipline.” But what followed? One of the biggest Gold bull markets in history. From the late 1960s to 1980, Gold exploded higher globally, and in rupee terms the move was even more brutal. This is the real lesson: When governments tell citizens not to buy Gold, they are usually not worried about your jewellery. They are worried about pressure on the currency, pressure on reserves, and pressure on the financial system. Gold doesn’t become important when everything is normal. Gold becomes important when the system starts asking you not to buy it.