India now controls a remarkable 15% of the global gold market, valued at approximately $23 trillion, as per DSP Mutual Fund’s July 2025 Netra report. This milestone underscores India’s pivotal role in global gold dynamics.
📊 1. What does 15% share signify?
With the global gold market pegged at $23 trillion, India’s 15% control equates to around $3.45 trillion in gold holdings . This influence stems from a combination of:
- Household and temple reserves: Indian families and religious institutions together hold approximately 25,000 tonnes of gold—valued at $2.4 trillion—making them the largest private gold holders globally
- Central bank reserves: The Reserve Bank of India (RBI) holds around 880 tonnes, representing about 12–13% of its foreign exchange reserves
🏦 2. Rising global demand and central bank trends
- In 2024, central banks globally purchased gold worth $84 billion, nearly matching the cumulative purchases from 2000–2016
- Total central bank reserves grew to between 32,000–36,000 tonnes, nearing historical peaks driven by countries hedging against currency risks
🔔 3. Why gold remains so attractive
- Reserve diversification: Gold’s share in official reserves reached 20%, surpassing the euro (16%) and second only to the US dollar at 46%
- Geopolitical uncertainty & inflation: The 62% rise in gold prices through April 2024–2025 reflects a flight to safety as central banks reduce reliance on volatile assets like US Treasuries .
💰 4. India’s domestic investment surge
Indians increasingly view gold as a financial refuge:
- ETF inflows: Gold ETFs in India saw a record ₹37.5 billion inflow in January 2025 alone—more than triple the average monthly inflows
- Physical investment: Recorded demand jumped 60% in 2024 to 239 tonnes (worth about $18 billion), comprising 20% of global investment demand
- Gold‑backed loans: With rising usage, these loans surged 74% from April 2024 to February 2025
🔎 5. What it all means for India
- Economic safety net: With gold valued at roughly 56% of GDP, Indian households rely heavily on it for financial stability
- Trade implications: High gold imports—about 87% of domestic consumption—widen the trade deficit by $55–60 billion (1.2% of GDP) The New Indian Express.
- Price forecasts: UBS projects gold could reach $3,500/ounce again in FY26, driven by global instability and sustained demand
✅ 6. Outlook & implications
- A mere 5% shift from global forex reserves into gold could trigger a powerful price rally—something underscored by DSP’s Netra report
- India remains strategically positioned to benefit or be tested by such a move, given its massive gold holdings and deep cultural-economic integration with the metal.
