During the first two days of Diwali, Indians purchased more than 40 tons of gold, according to data from the India Bullion and Jewellers Association (IBJA) and the All India Gem and Jewellery Domestic Council (GJC).
Most buyers preferred gold coins and bars over traditional jewelry, marking a strong tilt toward investment-led purchases.
Investment Demand Outshines Festive Consumption
Gold buying this Diwali was driven primarily by investment motives. Between Rs 700 billion (US$8 billion) and Rs 1 trillion (US$11 billion) worth of gold was sold during the five-day festival that ended on Thursday, as per industry estimates.
Investors increasingly view gold as a safe-haven asset amid global economic uncertainty. Households opted for gold bars, coins, ETFs, and digital gold to protect and diversify their wealth.
Gold ETFs See Massive Inflows
According to the Association of Mutual Funds in India (AMFI), inflows into gold ETFs rose more than six-fold year-on-year in September, touching Rs 83.63 billion. This surge highlights a growing preference for digital and paper gold investments over physical forms.
India’s Household Gold Wealth Nears $3.8 Trillion
A Morgan Stanley report estimated that Indian households hold about $3.8 trillion worth of gold — nearly 89% of India’s GDP. This massive gold wealth creates a positive wealth effect, supporting consumer confidence even as gold demand remains stable.
RBI’s Gold Reserves Reach 880 Tonnes Worth $95 Billion
The Reserve Bank of India (RBI) increased its gold reserves to 880.18 metric tonnes by the end of September 2025, slightly up from 879.58 tonnes last year. The total value of these holdings stood at $95 billion, reflecting both small additions and higher global prices.
During the first half of FY2025–26, the RBI purchased 0.6 tonnes of gold, continuing its cautious accumulation strategy. In comparison, the central bank had added over 54 tonnes in 2024–25, one of its largest annual increases in recent years.
Globally, central banks bought around 166 tonnes of gold amid economic and geopolitical uncertainty. Rising prices and strong demand highlight gold’s role as a safe-haven asset and a key part of India’s reserve diversification strategy.
Why Indians Continue to Trust Gold
Gold has long been part of India’s cultural and financial identity. Buying gold during Diwali and Dhanteras is considered auspicious, symbolizing prosperity and financial security. In recent years, however, gold’s appeal has grown beyond tradition — becoming a trusted investment against inflation and currency volatility.
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