India has seen a significant increase in the value of its privately held gold stocks, according to estimates by the World Gold Council (WGC) and consultancy firm Metal Focus.
By September 2024, the estimated gold holdings of Indian households ranged between 23,537 tonnes and 25,537 tonnes, valued at between ₹178 lakh crore ($2.11 trillion) and ₹193 lakh crore ($2.29 trillion). This marks a $400 billion increase in value since December 2023.
Gold’s Rising Value and Its Economic Implications
Gold prices have risen notably in 2024, reflecting its resilience amidst global economic uncertainty. By September, the price of gold reached ₹75,549 per 10 grams, up from ₹63,396 at the end of 2023. If current trends persist, the total value of India’s gold holdings could reach ₹200 lakh crore ($2.37 trillion) by the end of the year, approaching the nation’s GDP of ₹295.36 lakh crore.
Composition of India’s Gold Stocks
India’s gold stocks, estimated to be among the largest globally, are predominantly held by households, with contributions from temples, religious trusts, and the Reserve Bank of India (RBI). Notable examples include the Sri Padmanabhaswamy Temple, estimated to hold 1,300 tonnes of gold, and the Tirumala Tirupati Devasthanams, with approximately 10.3 tonnes.
RBI’s official gold reserves stood at 854.73 metric tonnes as of September-end 2024. However, informal sources of gold, such as legacy holdings predating the 1990s and recycled gold, contribute significantly to the overall stock. Recycled gold alone accounted for 117 tonnes in 2023.
The Historical Context and Sources of Gold
India’s gold imports have been a key factor since the repeal of the Gold Control Act in the 1990s, which previously restricted gold ownership. Over the last two decades, annual imports have stabilised at approximately 700–800 tonnes. Chirag Sheth, founder of Metal Focus, highlights that earlier smuggling activities and under-caratage issues in legacy gold holdings also contribute to the complexity of India’s gold reserves.
“It also includes part of the gold lying idle with the temples, religious trusts and other organisations, which could roughly come around 4,000 tonnes. We have around 700 temples which own gold, including ones like Sri Padmanabhaswamy temple in Thiruvananthapuram, Tirupati Tirumala temple, Vaishno Devi temple and Siddhi Vinayak temple,” said Sheth.
Implications for Jewellers and the Industry
For jewellers, the increase in gold value highlights its enduring appeal as an asset, particularly during times of uncertainty. The rise in gold’s value could influence consumer spending on jewellery, particularly during traditional periods of high demand. Furthermore, the recycling trend presents opportunities for jewellers to tap into secondary markets, aligning with sustainability goals and consumer preferences.
