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India's Gold Investment Share Surges 42% in CY25, Hits Record

Investment share in India's gold consumption surged to 42% in CY25 from 29% in CY24, driven by gold ETFs and bar-and-coin buying. Global gold demand hit a record 5,000 metric tonnes, up 8% YoY, fueled by geopolitical uncertainty and safe-haven demand. Indian jewellery demand remained resilient, rising 10% YoY to Rs 4.8 lakh crore despite record gold prices. CareEdge forecasts listed jewellers to see 35% revenue growth in FY26 and investment share in gold consumption at 35-40% in FY27.

Key Points: India Gold Investment Surge 42% in CY25

  • Investment share in gold consumption jumps to 42% in CY25 from 29%
  • Global gold demand hits record 5,000 MT, up 8% YoY
  • Indian jewellery demand resilient, rises 10% YoY to Rs 4.8 lakh crore
  • Listed jewellers forecast 35% revenue growth in FY26
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Investment share in India's gold consumption see huge 42 pc jump in CY25

India's gold investment share jumps to 42% in CY25 from 29%, driven by ETFs and safe-haven demand. Global demand hits record 5,000 MT.

"Geopolitical uncertainty, momentum in gold prices and portfolio diversification preferences are expected to continue fuelling investment demand for gold - Akhil Goyal, Director, CareEdge"

New Delhi, April 27

Investment share in India's gold consumption rose to 42 per cent in CY25 from 29 per cent in CY24 as investment demand surged, led by gold ETFs and bar-and-coin buying, reflecting safe-haven demand, diversification motives and geopolitical uncertainty, a report showed on Monday.

Global gold demand reached a record in CY25, up 8 per cent YoY to roughly 5,000 metric tonnes (MT), driven primarily by robust investment demand despite sharply higher gold prices and macroeconomic headwinds, the report from CareEdge Ratings said.

"Geopolitical uncertainty, momentum in gold prices and portfolio diversification preferences are expected to continue fuelling investment demand for gold, with its share in overall gold consumption projected at 35-40 per cent in FY27," said Akhil Goyal, Director, CareEdge.

The ratings agency noted that Indian jewellery demand remains resilient despite record gold prices with jewellery purchases rising roughly 10 per cent YoY to Rs 4.8 lakh crore in CY25. Indians' total spending on jewellery purchases has grown at a healthy compounded annual growth rate (CAGR) of 11 per cent over CY21-CY25.

It forecasted listed jewellers to see 35 per cent YoY revenue growth in FY26 and 20-25 per cent in FY27 led by continued store additions, market share gains from accelerated formalisation of the sector.

Average gross profit margin is projected to increase by 170-200 bps in FY26 led by inventory gains on unhedged gold.

The ratings agency highlighted that annual global investment demand at 2,175 metric tonnes (MT) in CY25 smashed the previous record of 1,805 MT in CY20 led by ETF investment at 800 MT.

Asset diversification due to elevated geopolitical risks and safe-haven demand drove the demand. India also showed a similar trend with strong ETF investments in the last two years, adding 37.5 tonnes in CY25, higher than the combined investment in the last 10 years.

Central banks continued large-scale gold accumulation for the fourth consecutive year, underscoring gold's role in reserve diversification amid geopolitical challenges.

Global gold consumption saw a structural shift with the share of jewellery down roughly 19 per cent YoY to 33 per cent in CY25, much below the 15-year average. Share of jewellery consumption in the Indian market fell below 60 per cent of total gold purchases in CY25 compared to long-term average of roughly 70 per cent.

- IANS

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Reader Comments

S
Sarah B
The global trend is fascinating – central banks hoarding gold for 4 years straight really shows how uncertain the world has become. Makes sense for India too with all the geopolitical tensions. I just hope small investors aren't getting caught in a bubble chasing these high prices.
V
Vikram M
My grandmother always said "gold never loses its value" – looks like she was right! ₹4.8 lakh crore on jewellery in a year is mind-boggling. But I worry about the falling share of jewellery consumption – what happens to the lakhs of karigars (artisans) who depend on this sector? Automation and formalisation might hurt small workshops.
J
James A
Smart move by Indians to diversify into ETFs – 37.5 tonnes in just two years is impressive for a country that traditionally prefers physical gold. But the government should ensure better transparency in the gold market; we've seen too many scams with bogus jewellery schemes in the past.
P
Priya S
Nice to see gold ETFs taking off – so much less hassle than storing physical gold at home! But I wish the report mentioned more about digital gold platforms, which are making it easier for young professionals like me to invest in small amounts every month. The future of gold investment in India is definitely digital.
R
Rohit P
The 42% investment share is huge for India, but let's not ignore the elephant in the room – gold prices are at all-time highs partly because of global uncertainty. If tensions ease, prices could drop sharply. Hopefully people are not over-leveraging themselves with gold loans thinking the trend will continue forever.

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