Study OAS · 06 February 2025

Gold Investment Surge in India

Current Affairs in Detail

Record Growth: India’s gold investments surged by 60% in value terms in 2024, reaching $18 billion (₹1.5 lakh crore) compared to 2023. The demand in volume rose to 239 tonnes, the highest since 2013, marking a 29% increase from 185 tonnes in 2023.
Quarterly Momentum: The October-December 2024 quarter saw 76 tonnes of gold investment demand, nearly matching the previous quarter’s performance. This was driven by festive buying during Dhanteras and Diwali.
Global Share: India accounted for 20% of global gold investment demand (1,180 tonnes in 2024), while global demand grew by 25% from 945.5 tonnes in 2023.
Price Dynamics: Gold prices rose steadily through 2024, fuelled by geopolitical tensions and reduced import duties in July 2024. A price correction in November further attracted investors seeking lower entry points.
E-commerce Boost: Rapid delivery of small gold bars and coins via platforms like Amazon and Flipkart (within 10–15 minutes) drove urban demand, especially in metro cities.

Economic Uncertainty: Weak stock market performance (post-Q3 2024 decline) shifted investor focus to gold as a safe-haven asset.
Festive Demand: Dhanteras and Diwali purchases contributed to ~40% of annual demand in Q4.
Policy Shifts: Import duty cuts in July 2024 reduced gold prices temporarily, triggering a buying spree before prices rebounded.
Geopolitical Factors: Global tensions (e.g., U.S.-China trade disputes) and shifting interest rate expectations bolstered gold’s appeal.

ETF Recovery: Global gold ETF holdings recovered from a 4-year low of 3,080 tonnes in April 2024, barring a minor dip in November.
Future Outlook: The WGC predicts expanded demand for gold ETFs and mutual funds in 2025, driven by economic volatility and gold’s price resilience.
Market Impact:
Stock Market Correlation: A 15% decline in domestic stock markets in late 2024 redirected investments to gold, reinforcing its role as a portfolio diversifier 1013.
Rural vs. Urban Demand: While festivals drove rural purchases, urban demand was fueled by digital accessibility and quick delivery services.

The World Gold Council (WGC) is the market development organization for the gold industry.

What it is: A non-profit association supported by gold mining companies.
Role: Works to stimulate and sustain demand for gold. They're not selling gold directly, but promoting its use and value.

Research: Conducts research on the gold market, including supply, demand, investment trends, and the role of gold in the global economy. They publish reports and data on gold.
Market Development: Develops and implements programs to promote gold in various sectors, such as jewelry, investment, and technology.
Investor Relations: Provides information and resources to investors about gold as an investment asset.
Industry Advocacy: Works with governments and other organizations on issues related to the gold industry. They aim to create a favorable environment for gold mining and trade.
Consumer Education: Educates consumers about the value and uses of gold.