Gold investments in India rose 60% to $18 billion (about ₹1.5 lakh crore) in 2024, a big increase over last year, according to the World Gold Council.
Key points of the report
Gold investment demand in India
- 239 tonnes in 2024, the highest since 2013.
- 29% increase over 2023 (185 tonnes).
- Global gold demand: 25% increase from 945.5 tonnes in 2023.
- Future outlook: Gold demand expected to increase further, especially in gold exchange-traded funds (ETFs) and mutual funds.
- 2025 scenario: Central banks and gold exchange traded funds (ETFs) will play a key role in boosting demand.
India
- RBI added 73 tonnes of gold to its foreign exchange reserves.
- This pushed the share of gold to a record 11%.
Reasons for increased gold demand
Continuous rise in gold prices
- This was the main reason for the steady rise in gold prices throughout the year.
- Investors preferred gold to hedge against inflation and economic instability.
- Cultural demand: The traditional trend of buying gold on weddings and auspicious occasions led to an increase in retail demand.
Urban buying trends
- Metros saw an increase in gold purchases.
- E-commerce platforms made investing easier by offering faster delivery of small gold investment bars and coins.
- Weak performance of other assets: Average returns of domestic stock market attracted investors to gold
Current Status of Gold Resources
Global Reserves and Central Bank Activities
- In November 2024, global central banks increased their gold reserves by 53 tonnes.
- This indicates recognition of gold as a stable and safe asset, especially in emerging markets.
Countries with Top Gold Reserves
- The United States (8,133.5 tonnes) holds the highest gold reserves in the world.
- India is among the top 10 countries with the highest gold reserves.
- Gold Resources in India (as on 1 April 2015)
- Total gold ore reserves: 83 million tonnes.
- Reserves: 22 million tonnes.
- The rest classified as other resources.
State wise gold ore reserves distribution
- Bihar – 44%, Rajasthan – 25%, Karnataka – 21%
- West Bengal – 3%, Andhra Pradesh – 3%, Jharkhand – 2%
- Others (Chhattisgarh, Madhya Pradesh, Kerala, Maharashtra, Tamil Nadu) – 2%
- Mineral Exploration and Reclamation
- Geological Survey of India (GSI) is actively engaged in land mapping and mineral exploration.
- Government of India amended the “Minerals Evidence of Mineral Contents Rules” to promote private sector participation in exploration and mining of deep minerals including gold.
Impact on Indian Economy
- Current Account Deficit (CAD) will increase: More gold imports will put pressure on foreign exchange reserves.
- Inflation will increase: Increasing demand for gold will increase its prices, which may lead to inflation.
- Financial market will be affected: More investment in gold may reduce liquidity in the stock market.