Did you know that India has the largest private gold holdings in the world, carrying around 25,000–35,000 tonnes of gold? Believe it or not, India’s private gold stash beats both China and the U.S. and even tops the combined reserves of the world’s biggest central banks.
According to a Morgan Stanley report, the amount found in Indian households combined has reached $3.8 trillion, which is equivalent to 88.8% of India’s GDP, creating what you call the "wealth effect". This provides more security and confidence among Indian families, leading to more spending on non-essential goods and services.
The gold rally began off in early 2024 when investors everywhere started buying in, worried about a global slowdown, unstable currencies, and all the political tension.
Most Indian families, no matter where they live, believe in the importance of passing down gold. Gold is exchanged with love during weddings and festive days like Dhanteras and Diwali, becoming a part of family memories and traditions.
Across generations, Indians have trusted gold as the safest way to preserve wealth and blessings. Almost every Indian home owns some form of gold for both its sentiment and its value.
October 2025 data shows that gold prices in India skyrocketed to 61.8%, setting a new high record. 24-carat gold hits around ₹1.28–₹1.30 lakh per 10 grams, which is around $4,000 per ounce globally. The last best record of gold's value was in 1979 but now it has even outperformed previous crises like 9/11, 2008, and COVID-19.
The Reserve Bank of India added 75 tonnes to its reserves in 2024-25, now holding 880 tonnes, or 14% of its total FX reserves.
The strong gold purchases by central banks (like RBI), the weakening of the USD, the expectations of interest rate cuts, and political tensions around the world have been the key driving factors behind the surge in gold prices.
Also with the government's interest in economic growth in India, citizens are benefitting from reductions in income tax and GST. With more disposable income, people can save more money and buy gold and equities with that extra cash.
Now with less money going into bank deposits, experts think that people will be investing more in stocks in the future. The share of stocks in household savings jumped to 15.1% in FY25, from 8.7% in FY24 and only 4% before the pandemic.
At the same time, bank deposits dropped to 35% in FY25, down from 40% last year and 46% before COVID. Morgan Stanley says “this trend will continue because of favourable demographics and increasing investor education.”