India, the world’s second-largest gold market after China, witnessed a remarkable surge in gold imports during October 2023. Even accounting for high prices, the country’s long-standing love of gold has made it a mainstay, helping to boost demand, especially for the country’s busy festive season. With the major festival of Diwali and auspicious Dhanteras day boosting gold demand. Top among gold imports The World Gold Council has estimated India’s gold imports last month to be between 137 and 142 tonnes.
Gold has never not been revered in Indian culture. It can no longer be an ornament, it is a critical asset. Moreover, it functions as a store of wealth, something particularly valuable in more impoverished rural areas where banking institutions are less readily available. These recent statistics illustrate a staggering 87 percent of Indian households possess some sort of gold. Yet this precious metal is far more than just aesthetic. To millions of working families, it’s a critical buffer against economic peril.
Recent surveys highlight this trend further. A 2018 ICE360 survey revealed that one in every two households in India had purchased gold within the last five years. More than 75 percent of families in the first three deciles of income have already managed to obtain at least one gold. This underscores gold’s importance as a truly universal asset that spans economic divides. This widespread ownership illustrates how deeply ingrained the value of gold is in Indian society.
The appetite for gold was particularly robust across this fall’s festivals, a testament to traditions as well as safe-haven spending. “Healthy sales across both single-store and large multi-store formats, the latter benefitting from brand trust and promotional initiatives,” reported the World Gold Council, underscoring the versatility and appeal of gold jewelry in the market.
Interesting, about 2/3 of India’s gold demand comes from the countryside, not the cities. Second, in the majority of these communities, they exist outside established tax regimes, thus impacting literally where they buy and how they buy. This unique blend of cultural significance and practical utility continues to encourage them to invest in gold.
Aside from physical gold, investment in gold exchange-traded funds (ETFs) has seen a significant boost. Specifically, in October Indian-backed gold ETFs achieved an incredible milestone—passing the 911,000 new account. This increase brought the overall folios count to a remarkable 9.57 million. Year-to-date figures indicate that cumulative inflows into these ETFs have reached ₹276 billion. That’s about $3.1 billion. That’s the most annual inflows on record! This shift demonstrates a growing trend among investors who see gold as a stable and profitable asset amid economic fluctuations.
During this time, the World Gold Council highlighted that the Indian rupee lost 3.3 percent against the U.S. dollar. This devaluation has, as a result, made gold much more expensive in the domestic market. Rather than discourage buyers, the opposite seems to be true, as this rushed demand only spurred buyer appetite further.
Whether India is booming or busting, the loyalty to gold is evident as the country charts its economic course. For both rural families and urban financiers, gold is a cultural icon. It serves as the most convenient form of long-term wealth protection. This year’s import numbers are still a testament to a rich tradition. They present a portrait of a market in flux, changing to accommodate the evolving domestic and international economic landscapes.