MUMBAI: The recent steep rise in the price of gold has catapulted the total estimated value of the yellow metal with Indian households to over $5 trillion, pegging it at about 125% of the country’s GDP. However, this massive gold purchase year after year “represents a conversion of financial savings (bank deposits) into physical assets. This is tantamount to exports of household capital,” a report by Kotak Institutional Equities noted.The report has used data till Jan 2026. At $5 trillion, this translated to about Rs 445 lakh crore at end-Jan. This would have been slightly lower than India’s market capitalisation which was at Rs 460 lakh crore, BSE data showed. “The value of stock of gold with households is now a sizable 65% of the non-property stock of wealth with Indian households,” the report noted. “We estimate the value of stock of gold with Indian households at 175% of value of deposits and equity with (them).” It estimated that the value of gold with household has gone up by more than four times in about five years: from Rs 109 lakh crore at end-March 2019 to Rs 445 lakh crore by end-Jan this year. And most of it has come through the import channel. The import of gold to meet household demand, year after year had some serious implications. “Other external sector flows remaining constant, this implies a drawdown of RBI’s (forex) reserves, mirrored in lower net foreign currency assets on RBI’s balance sheet,” the report, by Sanjeev Prasad, Anindya Bhowmik and Sunita Baldawa said.
