đ Indian Households Own ~$4.5T in Gold â Will It Boost Spending?
âą Gold Wealth Hits Record Levels
Indian households collectively hold around 28,000 tonnes of gold (including temples), now valued at about $4.5 trillion â exceeding Indiaâs estimated GDP for FY26.
âą Wealth â Consumption Boost
Despite this massive valuation surge (gold prices up ~42% between FY24â26), the wealth effect isnât driving broad consumer spending. Cultural preferences lead most owners to hold rather than sell gold.
âą Gold Loans Filling the Gap
Instead of liquidation, households are increasingly using gold as collateral for loans â helping unlock cash for rural consumption, business needs, education and healthcare without selling the metal.
âą Jewellery Demand Slows
Record bullion prices are expected to reduce jewellery demand by ~15% YoY this fiscal, even as investment demand remains solid.
đĄ Expert Insight:
Indiaâs gold reserve is a huge latent asset, but its impact on economic consumption is limited unless more wealth gets channeled through financial instruments or loan markets rather than staying locked in jewelry and safes.
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