New Delhi1 hour ago
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The total value of gold held by Indian households has crossed $5 trillion (₹450 lakh crore). This figure is more than the country’s total GDP of 4.1 trillion dollars i.e. Rs 370 lakh crore. This has happened due to gold prices reaching record high.
According to a report by Morgan Stanley, about 34,600 tonnes of gold is deposited in Indian households and in the international market, gold is trading beyond $ 4,500 per ounce (₹ 1,42,700 per 10 grams). That means, if we look at the total value of gold kept in Indian homes, it is more than the entire economy of the country.
Expert said – it is not just investment, it is security and trust
According to Dr. Manoranjan Sharma, Chief Economist of Infomerics Valuation and Ratings, this comparison is quite interesting. He said, ‘GDP is a flow variable i.e. continuously changing whereas gold holding is a stock.
This figure reflects the cultural, financial and psychological importance of gold in the Indian economy. In times of war, economic crisis or inflation, Indians rely most on gold and the US dollar.
Does rising gold prices increase purchasing power?
It is generally believed that when the price of an asset increases, people feel richer and spend more. This is called wealth effect. However, a report by MK Global claims the opposite.
According to reports, 75-80% of gold in India is in the form of jewellery. People see it as long term saving and tradition. Since people do not sell it, the increase in prices does not have any significant impact on their everyday consumption or purchasing.
RBI is also continuously increasing its treasury
Not only common people, Reserve Bank of India (RBI) is also continuously increasing its gold stock. RBI has added 75 tonnes of gold to its reserves since 2024. Now India’s total government gold reserve has reached 880 tonnes. This accounts for about 14% of India’s total foreign exchange reserves.
Prices rising due to heavy purchases from China
Market experts believe that behind this rise in gold prices, not only the common people but also the central banks around the world are behind it. China’s ‘People’s Bank of China’ is buying gold on a large scale. Many countries are now considering gold as a safe option to reduce their dependence on the dollar and avoid geo-political risks.
How to get rid of ‘waste’ money kept in homes?
The biggest challenge for economists is that gold kept in homes is an ‘idle asset’ (an asset that does not generate any income). The government has given options like Gold Bond (SGB), Gold ETF and Digital Gold so that people can invest in financial gold instead of physical gold, but the love of Indians for physical gold i.e. jewelery and coins is not decreasing.
According to Indian agencies, the price of gold…
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