India’s Love Affair with Gold
a market that never sleeps
Gold – it's more than just a precious metal in Bharat. It’s a symbol of prosperity, tradition, and security. Whether it's a wedding, a festival, or an investment, gold is deeply embedded in the cultural fabric of Indian society.
From the streets of Zaveri Bazaar in Mumbai to the showrooms of Tanishq, India’s gold market is a testament to a love that never sleeps. But what fuels this obsession? And why does this precious metal continue to be the backbone of India's jewelry industry?
We will learn about it here today.
But before we start, here’s a dose of positivity for you:
Success is the sum of small efforts, repeated day in and day out
The emotional bond
In many Indian households, gold jewelry is considered a safe investment, an heirloom that is passed down through generations. This emotional attachment makes gold more than a financial asset – it’s part of the story of an individual or family.
Take weddings, for instance. Gold is a non-negotiable part of the celebration. The lavish gold jewelry worn by brides is a symbol of their family's status and is believed to bring good fortune. The sheer volume of gold used in Indian weddings is staggering.
According to the World Gold Council, India accounts for nearly 25% of global gold demand, with a significant portion of that consumed during the wedding season. In 2023, the value of gold jewelry purchased for weddings was estimated to be in the billions of dollars.
During the Akshaya Tritiya festival, the demand for gold jewelry reaches new heights. Traditionally considered one of the most auspicious days for making purchases, sales in jewelry stores see an uptick of over 40% during this period, with some outlets even offering discounts and promotional schemes. Festivals like Diwali and Dussehra also drive significant gold purchases, as they are seen as an ideal time to buy this precious metal for good luck and prosperity.
Why gold is the go-to investment in India?
In a country where economic uncertainty is commonplace, gold offers a sense of security and stability. While traditional financial instruments like stocks and bonds may not be easily accessible or well-understood in rural areas, gold remains a universal investment vehicle.
Indians often buy gold as a hedge against inflation and as a safeguard against fluctuating currencies. The metal’s ability to hold its value across economic cycles makes it an attractive option for Indians of all socioeconomic backgrounds.
Even as the stock market fluctuates or real estate prices rise and fall, gold has remained a steady investment that offers peace of mind. In rural India, where financial literacy may not be as widespread, gold is the preferred form of wealth storage. Gold loans are common in these areas - farmers or traders pledge their gold to secure short-term credit, a practice that's as old as time in many Indian communities.
Moreover, gold is tangible and portable. When people are in need of emergency funds, they can sell or pledge their gold, making it an easily accessible source of liquidity. With India’s banking infrastructure still under development in rural regions, gold provides an alternative source of financial security.
In fact, reports indicate that India’s gold loan market is projected to grow at a compounded annual growth rate (CAGR) of over 15% in the coming years, highlighting its importance as a source of financial stability.
The growth of organized retail and digital gold
India’s gold jewelry market has long been dominated by local jewelers, but in recent years, organized retail has taken off. Jewelers like Tanishq, owned by the Titan Company, have led the way by offering transparency in pricing, certification, and warranties, making gold jewelry more trustworthy for the modern consumer. Moreover, the growing middle class’s demand for high-quality gold has opened doors for national and international brands to set up shop in India.
The rise of digital gold platforms, such as Paytm Gold and PhonePe Gold, has made gold even more accessible, especially to the younger, tech-savvy crowd. Digital gold allows users to buy and store small amounts of gold online, which can later be converted into physical gold or sold. This method of buying gold has revolutionized the market by allowing everyday consumers to participate in gold investment without the need to visit physical stores.
With online platforms making it easier for people to invest in gold in smaller quantities, many Indians are now able to begin building their gold portfolio in affordable chunks, making gold a more accessible form of savings. As these platforms grow, their appeal is likely to continue expanding beyond urban areas into smaller towns and rural pockets, driving further growth for the industry.
So, investing in gold is always a good idea. That’s it from me today. What are your views? Share it in the comments, and let’s learn something from each other.
See ya 👋
