Investment demand for gold has fundamentally transformed in India, with investment demand surpassing jewellery consumption for the first time in the March quarter. According to reports from The Hindu BusinessLine, this marks a significant evolution from traditional gold ownership to strategic asset allocation. The June quarter investment demand remained above its long-term average since 2000, indicating sustained momentum in this shift. Younger Indians are driving this change, with millennials and Gen Z exchanging or recycling inherited ornaments to fund homes, higher education and new businesses or reinvest in financial products.
The most dramatic shift is visible in jewellery consumption trends. As reported by 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. Exchange-led purchases now account for up to 70 per cent of sales at some retailers, reflecting the growing preference for investment-grade formats. The World Gold Council observes a gradual 'financialisation' of gold holdings led by younger investors with better digital access, indicating a broader generational change in how Indians view gold ownership.
Digital gold platforms are experiencing explosive growth, with Indian gold ETF holdings nearly doubling from about 40 tonnes in early 2024 to 98 tonnes by early 2026. According to The Hindu BusinessLine, around 14 crore Indians now use digital gold, with the average ticket size at just ₹100, making it accessible to first-time savers. This low barrier to entry allows investors to begin small and build gradually, expanding gold's reach beyond traditional wealthy households.
The government 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. As reported by The Hindu BusinessLine, the Digital Precious Metals Assurance Council of India (DPMACI) has been formed to standardise how gold is bought, sold and stored, with MMTC-PAMP among the founding members alongside SafeGold, Augmont and fintech platforms. SEBI has cautioned investors that such products operate outside its purview, reflecting the need for comprehensive regulatory oversight.
The transformation represents gold moving from traditional household items to a strategic financial asset weighed as an inflation hedge, a diversifier and a store of value that does not depend on any single economy. According to the report, trust becomes the deciding factor as gold moves from the locker to the portfolio, with investors asking harder questions about purity, transparency and physical backing. The industry is calling for oversight to match the scale of participation, with the next chapter likely to be written by institutions that make gold verifiable, accessible and worthy of long-term trust.
