Why gold has become a strategic asset for Indian investors

SENSEX 74,459.53

+ 308.49

NIFTY 23,053.10

+ 116.35

CRUDEOIL 9,915.00

+ 206.00

GOLD 138,475.00

 -4,121.00

SILVER 178,944.00

 -10,509.00

SENSEX 74,459.53

+ 308.49

NIFTY 23,053.10

+ 116.35

NIFTY 23,053.10

+ 116.35

CRUDEOIL 9,915.00

+ 206.00

CRUDEOIL 9,915.00

+ 206.00

GOLD 138,475.00

 -4,121.00

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Investors are asking harder questions about purity, transparency and physical backing, and the industry itself is calling for oversight to match the scale of participation

By Samit Guha

Updated - November 01, 2026 at 11:00 AM.

For generations, gold in Indian households meant a bridal set in the bank locker or a coin gifted at a festival, held with reverence and rarely questioned. That relationship is being rewritten. In the March quarter, investment demand for gold surpassed jewellery consumption for the first time. In the June quarter, investment demand stayed above its long-term average since 2000. While Indians continue to value gold deeply, they are increasingly treating it as something to allocate to, not just something to wear or inherit. Gold is becoming a strategic financial asset.

A generation that sees gold differently

The clearest signal comes from younger Indians. According to ICRA’s analysis, gold jewellery demand by volume fell 21 per cent in FY2026, while demand for bars and coins rose about 22 per cent. Millennials and Gen Z are exchanging or recycling inherited ornaments to fund homes, higher education and new businesses, or to reinvest in financial products. Exchange-led purchases now account for up to 70 per cent of sales at some retailers. Sociologists observe that young Indians are also gravitating towards ‘paper’ gold such as ETFs (Exchange-Traded Funds). The World Gold Council (WGC) sees the same pattern, a gradual ‘financialisation’ of gold holdings led by younger investors with better digital access.

This shift has a global backdrop. Geopolitical conflicts have made investors more thoughtful about where they park their wealth. Gold does not depend on the success of any single country, central bank or currency.

Bars, coins and digital gold

Investor preference is moving to formats that suit investing. Bars and coins anchor physical investment because of their purity and direct price linkage. Digital and exchange-traded routes are widening access. Indian gold ETF holdings nearly doubled from about 40 tonnes in early 2024 to 98 tonne by early 2026. Around 14 crore Indians now use digital gold. The average ticket size is just ₹100, which lets first-time savers begin small and build gradually.

Purity and trust come first

As gold moves from the locker to the portfolio, trust becomes the deciding factor. An investor buying a bar, coin or digital unit is relying on the authenticity of the metal and the integrity of the system behind it.

The Government of India has reportedly begun discussions on requiring every unit of digital gold to be backed by physical bullion, with joint oversight by the Reserve Bank of India and SEBI. The broad stakeholder consensus is that it should be recognised as a security. SEBI cautioned investors in 2025 that such products operate outside its purview. It has formed a self-regulatory body, the Digital Precious Metals Assurance Council of India (DPMACI), to standardise how gold is bought, sold and stored. MMTC-PAMP is among the founding members of the Digital Precious Metals Assurance Council of India (DPMACI), alongside SafeGold, Augmont and fintech platforms, reflecting the industry’s collective efforts to strengthen trust and accountability in the digital precious metals ecosystem.

The road ahead

The gold in Indian households has not changed, but the way Indians think about it has. It is now weighed as an inflation hedge, a diversifier and a store of value that does not depend on any single economy. As this market matures, trust will decide who leads it. Investors are asking harder questions about purity, transparency and physical backing and the industry itself is calling for oversight to match the scale of participation. Gold has moved from the locker to the portfolio. Its next chapter will be written by the institutions that make it verifiable, accessible and worthy of long-term trust.

The author is Managing Director and CEO at MMTC-PAMP India Pvt. Ltd.

Published on November 1, 2026

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