Gold boom swells Indian household stock to almost US$3.8 trillion
For Indians, gold is woven into cultural, religious and social life
[NEW DELHI] Indian households are witnessing a jump in wealth after their 34,600 tonnes of gold holdings – weighing more than 6,000 elephants – have climbed in value following the recent record rally, according to a report.
The massive gold holding accumulated over generations, estimated at almost US$3.8 trillion, is creating a “positive wealth effect on the household balance sheet, given the uptrend in gold prices,” Morgan Stanley Economists Upasana Chachra and Bani Gambhir wrote in a note on Thursday (Oct 9).
For Indians, gold is woven into cultural, religious and social life. Families accumulate gold not only as a form of long-term savings or financial security during emergencies, but also as a symbol of prosperity in religious rituals. The precious metal is often given as gifts during weddings and festivals, strengthening family ties and passing wealth from one generation to the next.
The latest estimate is far higher than a World Gold Council report in July 2023 that had pegged Indian households’ total gold collection at around 25,000 tonnes. The South Asian nation is the world’s second-largest consumer of gold.
The sharp increase in estimated gold wealth comes at a time when gold prices have risen more than 50 per cent this year to a record high of above US$4,000 an ounce, putting it on track for its biggest gain since 1979.
The rally is being driven by central bank buying, geopolitical tensions and interest rate cuts by the US Federal Reserve. In India, local prices tend to track global moves as the world’s most populous nation imports most of its yellow metal requirements.
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The Reserve Bank of India (RBI) has helped support sentiment, buying around 75 tonnes of gold since 2024 and lifting its total holdings to 880 tonnes – about 14 per cent of India’s foreign exchange reserves.
The gold-related wealth effect in the country is getting an extra boost as it comes amid cuts in the interest rate cycle by the RBI and lowering of consumption taxes by the government, the note said. BLOOMBERG
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