Crime Today News
When John Pierpont Morgan, Founder of the world’s largest bank by market capitalisation JP Morgan & Co, said ‘Gold is money. Everything else is credit’, little would he have known that no one would come to understood this better than ‘Indian housewives.’
In a recent post on X, veteran banker Uday Kotak lauded ‘Indian housewife’ as the smartest fund manager in the world for importing the ‘forever store of value’ – gold, into the country while the developed markets’ central banks and governments took to money printing. This compliment is well earned if one looks at the staggering numbers.
The total purchase of gold by Indian households in the last 15 years amounted to 12,000 tonnes of which 8,696 tonnes are jewellery and the remaining 3,310 tonnes as bars and coins. A calculation based on each year’s average price of gold and quantity of gold consumed by households in its various forms, indicates approximate gains of ₹59 lakh crore or $700 billion at the current gold price.
But that’s not all!
Many repositories
World Gold Council (WGC) estimates cumulative holding of 25,000 tonnes by Indian households in a report issued around a year back. A report by India Gold Policy Centre suggests that South Indian temples hold 3,000-5,000 tonnes of gold. In addition, as of February 2025, the Reserve Bank of India (RBI) also held 879 tonnes of gold, accounting for nearly 13 per cent of its total reserves, per WGC data.
Altogether, India’s gold stockpile is estimated at around 30,000 tonnes, worth a staggering $3.2 trillion based on the current market price of $3,319/ounce. To put this into perspective, India’s current stock market capitalisation is at around $4.9 trillion.
Interestingly, India’s estimated 30,000 tonnes is about 14 per cent of the total above ground stocks of gold (2,16,265 tonnes by the end of 2024) across the world.
Unique place
Gold holds a unique place in Indian culture, serving both as an adornment and a trusted investment. With a traditionally high savings rate, Indians have historically preferred gold as a store of value.
As such, there is no clear way to value gold. Its price and fluctuations are a reflection of global investor perception of various macro economic variables and expectations on how it will play out in the future. Geopolitical uncertainties, concerns on inflation are some of the factors that result in investors flocking to real assets such as gold. The money printing exercise, which initially started of as an experiment but morphed into a recurring habit post the global financial crisis as panacea for all economic slowdowns, has resulted in gold gaining significant traction.
During the period of big increase in global liquidity since end 2007 gold is up by around 298 per cent in dollar terms and 800 per cent in rupee terms. This is superior to S&P 500 and Nifty 50’s returns of 276 and 292 per cent!
Given India imports around 85-90 per cent of its demand for gold, this has resulted in the country raking in substantial wealth given the recent fiery run-up in this precious metal. Makes one wonder whether this is the way India will gain back its plundered wealth of earlier centuries!
However, while the wealth is there, key benefits for the country may accrue if and when an effective way is figured out to monetise some of this gold. But for now the country can rest in confidence of its wealth.
Published on April 26, 2025
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