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Home World News Us & Canada

Gold is part of India’s social fabric. As prices soar, customers watch, wait but, ultimately, still buy

May 31, 2025
in Us & Canada
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Gold is part of India's social fabric. As prices soar, customers watch, wait but, ultimately, still buy
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Sidheshwar Shirsath, who lives in the suburbs of India’s financial capital, Mumbai, first started buying gold when he got married nine years ago.

Shirsath, 35, works as a driver and earns about 55,000 rupees ($889 Cdn) a month. He decided that gold might be a good way to build a nest egg for his family’s future.

Whenever he had some cash to spend, he purchased gold jewelry, including rings and bangles, and he now has about 130 grams of gold, worth more than one million rupees ($16,000 Cdn).

“Sometime after I first bought gold, the rates started increasing, so my interest in investing in it also grew,” Shirsath said.

In recent months — to his delight — the price has skyrocketed.

Gold globally was trading at $3,298 US an ounce on Friday morning, up more than 25 per cent since the start of the year, and up 42 per cent compared with a year ago.

Gold’s value globally has surged amid global economic uncertainty and geopolitical tensions, including concerns about the impact of U.S. President Donald Trump’s tariff policy.

The precious metal is often seen as a “safe haven” asset that investors flock to during periods of economic turbulence.

‘Gold is a part of the social fabric’

In India, the price has risen even more sharply and is up 30 per cent since the beginning of the year — with the additional increase driven by the rupee’s depreciation against the American dollar.

But for many Indians, like Shirsath, gold is more than an investment.

“Gold is very close to Indian women,” he said, his wife, Manisha, sitting next to him in their modest home, adorned with a heavy gold choker and gleaming bangles. “They need gold — especially for festivals and weddings.”

Part of the Shirsath family’s gold jewelry collection is displayed. For many people in India, gold is more than an investment and a status symbol. It also holds religious and cultural significance. (Manoj Gaikwad/CBC)

In India, gold is primarily purchased it in the form of jewelry because it can be a way of showing off one’s wealth and status. The precious metal also holds enormous religious and cultural significance.

It is part of the dowry in weddings, for example, and it is considered to be auspicious to buy gold during certain Hindu festivals.

“India is a very unique market for gold ,” said Sachin Jain, regional CEO, India, for the World Gold Council, a global industry association. “Gold is a part of the social fabric, and you don’t need to be in any particular economic strata to consume gold.

“We all in India have a family doctor, so to say, and we have a family jeweller.”

India among world’s largest gold consumers

In rural India, where most of the country’s 1.4 billion people still live — and with many not having easy access to bank accounts — gold is a popular way of storing savings, Jain said.

All of this means that India is one of the world’s largest consumers of gold, with the country’s demand for the precious metal hitting about 800 tonnes a year.

The steep price, however, is having an impact on the quantity of the metal that people are buying.

Sachin Jain is regional CEO, India, for the World Gold Council. India is one of the world’s largest consumers of gold, with the country’s demand for the precious metal hitting about 800 tonnes a year. (Manoj Gaikwad/CBC)

“With jewelry consumption, whenever the price of gold goes up, the consumer waits and watches,” Jain said. “The moment it gets a bit settled, we see consumers come back.”

The World Gold Council’s data shows that demand for gold in India in the first three months of this year stood at 118.1 tonnes, down by 15 per cent compared with the first quarter of last year.

But because the price is up, the value of the country’s gold demand — which is the quantity of gold that is bought or invested — in the first quarter of this year actually rose by 22 per cent, to reach 940 billion rupees ($15.1 billion Cdn).

“People are buying lower quantities,” said Colin Shah, managing director of Kama Jewelry, a Mumbai-based manufacturer. “They all have budgets. If someone has $2,000 to spend, they’ll spend that and buy a lower volume.”

Colin Shah, managing director of Kama Jewelry, a Mumbai-based manufacturer, says people in India are buying lower quantities of gold because of its price, but the precious metal hasn’t lost its allure. (Manoj Gaikwad/CBC)

But, he said, that gold has by no means lost its shine, despite its high price.

“In India, there is a culture of gold, and nobody is going to stop buying gold because of pricing,” Shah said. “Actually, they’ll have more confidence in the category due to the return they are making on their money.”

Investing in gold digitally is on the rise

With Indians’ appetite to own gold showing no signs of easing, the government in recent years has taken a series of steps to try to ensure that gold is brought into the formal economy.

These include lowering the import duty on gold last year to six per cent from 15 per cent, partly as a way of making it less attractive for people to smuggle gold into the country to avoid paying high taxes.

The government also offers sovereign gold bonds as an alternative to physical gold.

Customers examine gold items in a well-stocked jewelry store in Mumbai, as the owner, centre, looks on behind the counter. As Indians’ desire to own gold has shown no signs of easing, the government in recent years has taken steps to try to ensure that gold is brought into the formal economy. (Manoj Gaikwad/CBC)

The World Gold Council’s Jain said that Indians are increasingly investing in gold digitally, for example, through exchange-traded funds (ETFs) — and the price surge has only encouraged people to look at these options.

“The young generation is getting more and more savvy, and with the ease of technology, we believe that investment into gold and gold assets is going to get a little more digital,” he said.

Gold investment demand, including ETFs, rose by seven per cent in India to 46.7 tonnes in the first quarter, according to the World Gold Council.

JPMorgan forecasts that the price of gold could hit $4,000 US an ounce next year.

Shirsath said that he and his family have more than enough jewelry now, but he still wants to keep buying gold.

“My next plan is to buy gold coins or go for bonds.”

WATCH | Big box stores offer gold to customers as its popularity heats up:

Why Costco is now selling gold

Gold has long been seen as a stable investment, and at a time of global uncertainty, it’s becoming so popular that big box stores such as Costco have jumped on the bandwagon.



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