Investment Demand for Gold Surpasses Jewellery in India as Younger Demographics Shift to Financialised Assets

A structural shift is underway in how Indian households interact with gold. Traditionally viewed primarily as jewellery held in bank lockers or acquired for festivals, investment demand for the precious metal surpassed jewellery consumption for the first time in the March quarter. Data shows that investment demand remained above its long-term average since 2000 in the June quarter.

This changing relationship is largely led by younger generations. According to ICRA’s analysis, gold jewellery demand by volume fell by 21 percent in FY2026, while demand for bars and coins grew by approximately 22 percent. Millennials and Gen Z are increasingly recycling inherited ornaments to fund education, housing, and new businesses, or to reinvest in financial products. Exchange-led purchases now account for up to 70 percent of sales at select retailers, while the World Gold Council notes a broader trend of financialisation driven by digital access.

Amid global geopolitical uncertainties, investors are treating gold as a strategic asset that does not rely on the success of any single central bank or currency. Formats that facilitate investment are gaining preference. Indian gold ETF holdings nearly doubled from approximately 40 tonnes in early 2024 to 98 tonnes by early 2026. Furthermore, around 14 crore Indians now use digital gold, with an average ticket size of ₹100, enabling first-time savers to build holdings gradually.

As gold transitions from a physical store of value in lockers to an active portfolio asset, the focus has shifted heavily toward trust, transparency, and physical backing. SEBI cautioned investors in 2025 regarding digital products operating outside its purview and established a self-regulatory body, the Digital Precious Metals Assurance Council of India (DPMACI). Founding members of DPMACI include MMTC-PAMP, SafeGold, Augmont, and various fintech platforms, aimed at standardising buying, selling, and storage practices. Meanwhile, the Government of India has reportedly initiated discussions regarding potential requirements for digital gold units to be backed by physical bullion under joint oversight by the Reserve Bank of India and SEBI.

"The financialisation of gold marks a significant evolution in consumer behaviour within the Indian market. As younger demographics increasingly adopt digital formats, exchange-traded funds, and bars over traditional jewellery, the entire ecosystem must adapt. For businesses operating in this space, building long-term trust, ensuring absolute physical backing, and aligning with emerging regulatory frameworks like the DPMACI will be critical to capturing this growing investor base sustainably." — Dr. Shishir Gupta, Founder & CEO, StartupLanes