The volume of gold in possession of Indian households is believed to have reached 25,000 tonnes this year.
According to the latest data of the World Gold Council (WGC) dating back two years, Indian households were believed to possess approximately 21,000 tonnes of gold, maintaining their position as the world’s largest holders of gold. Somasundaram PR, the Managing Director of WGC India, mentioned that the previous study estimated the household gold stocks to be around 21,000-23,000 tonnes, but now they are likely to have reached 24,000-25,000 tonnes.
As per the WGC, the upcoming July quarter is anticipated to witness an improvement in domestic gold demand due to traditional wedding season purchases and the Akshaya Tritiya festival. Additionally, the expectation of a normal monsoon this year bodes well for the rural economy and further boosts gold demand.
While jewellery is expected to be the primary driver of Indian gold demand, the consumption of bars and coins is projected to be higher compared to the previous year. Despite the government’s attempts to reduce domestic demand for physical gold through various means such as ETFs, SGBs, gold mining funds, gold fund of funds (FoF), and digital gold, the preference for physical gold remains strong and unaffected.
Despite offering interest rates ranging from 0.5% to 2.5% and providing exemptions from the capital gains tax, wealth tax, and income tax on value appreciation, the government’s gold monetization scheme (GMS) aimed at utilizing gold stored in lockers and cupboards has not gained significant traction.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
