Maybe, but where do you keep this gold if you live in country like India? Keep in in bank's vault and risk nationalization, or bury it in the backyard hoping nobody's going to find it? Indian emigrants working abroad in US or Europe can easily transfer the money to their families, would they send a gold instead? I looked into buying some physical gold once, it's not that easy and it's costly. Spreads bid/ask are huge, storage expensive, then gold bars are marked by whichever mint it came from, you won't get a good repurchase price on bars manufactured by other mins and you'll pay extra premium for buying small quantities (small bars are more expensive per gram). The alternative to buying physical gold would be buying gold contracts, but then all the features and reasons why people buy gold go away.
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