Value of gold owned by Indians exceeds India’s GDP:Silver climbs ₹15,000/kg in a single day, crossing the ₹2.43 lakh mark for first time; gold hits record high

Gold and silver prices are at an all-time high for the fifth consecutive trading day today, December 29. According to the India Bullion and Jewelers Association (IBJA), the price of 10 grams of gold increased by ₹205 to reach ₹1,38,161. Previously, it was at ₹1,37,956 per 10 grams. Meanwhile, silver became more expensive by over ₹15,000 per kg to reach ₹2,43,483 per kilo. Previously, it was at ₹2,28,107. This year, gold has become more expensive by ₹61,999 and silver by ₹1,57,466. The value of gold held by Indian families has crossed $5 trillion mark (₹450 lakh crore) due to gold prices reaching record highs in the international market. This figure is higher than the country’s total GDP ($4.1 trillion). According to a Morgan Stanley report, Indian households hold approximately 34,600 tonnes of gold, and gold is trading above $4,500 per ounce (₹1,42,700 per 10 grams) in the international market. According to the International Monetary Fund (IMF), India’s GDP is currently around $4.1 trillion (approximately ₹370 lakh crore). This means that the total value of gold held in Indian homes is more valuable than the country’s entire economy. Experts say – It’s not just investment, it’s security and trust According to M Sharma, Chief Economist at Infomerics Valuation and Ratings, this comparison is quite interesting. He said, “GDP is a flow variable, i.e., constantly changing, while gold holding is a stock. This figure reflects the cultural, financial, and psychological importance of gold in the Indian economy. During times of war, economic crisis, or inflation, Indians trust gold and the US dollar the most.” Does rising gold prices increase purchasing power? It is generally believed that when the price of an asset increases, people feel wealthier and spend more. This is called the wealth effect. However, a report by MK Global claims the opposite. According to the report, 75-80% of gold in India is in the form of jewellery. People see it as a long-term saving and tradition. Since people do not sell it, the increase in prices does not have a significant impact on their daily consumption or purchases. India accounts for 26% of global demand India is the second largest buyer of gold in the world. According to data from the World Gold Council (WGC): India’s share in total global demand is 26%: RBI is also continuously increasing its treasure Not only the general public, but the Reserve Bank of India (RBI) is also continuously increasing its gold stock. Since 2024, the RBI has added 75 tonnes of gold to its reserves. Now India’s total government gold reserve has become 880 tonnes. This is about 14% of India’s total foreign exchange reserves. Prices are rising due to heavy buying from China Market experts believe that not only the general public but also central banks around the world are behind this surge in gold prices. The ‘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 make Indian households spend ‘idle’ money kept in homes? The biggest challenge for economists is the gold kept in homes is an ‘idle asset’ (an asset that does not generate any income). The government has given options like Gold Bonds (SGB), Gold ETFs, and Digital Gold so that people invest in financial gold instead of physical gold, but the love of Indians for physical gold, i.e., jewellery and coins, is not fading away. ​