Gold has always been and will continue to be a timeless investment, cherished for its cultural significance and financial stability. In India, gold is way more than an investment, it is a symbol of love, wealth and heritage, often passed from generation to generation. What also sets gold apart is how it works as a safety net, offering individuals the ability to use gold as a hedge against inflation and easy liquidity in times of crisis.
Gold has remained the best-performing asset class in 2024, outperforming Nifty by over 10 per cent. The outperformance has been led by a softening interest rate environment, geopolitical risks remaining elevated and central banks continuing to add gold to their reserves. The yellow metal has given a return of close to 28 per cent in 2024, the best performance in the last 14 years.
And the bull run in the gold remains unabated prompting Goldman Sachs to raise its year-end 2025 gold price forecast to $3,100 per ounce, up from $2,890, citing sustained central bank demand. However, if policy uncertainty, including tariff concerns, remains high, Goldman sees the potential for gold to surge to $3,300 per ounce by year-end due to prolonged speculative positioning.
Indian consumption
In just under two months of the current calendar year, spot gold prices have already hit record highs 12 times, with the latest peak reaching $3,000 per troy on March 14, bringing year-to-date (YTD) gains to 13.86 per cent. In the domestic market, gold prices have surged past Rs 86,000 per 10 grams, an increase of nearly 11.70 per cent in 2025.
Indians have been buying gold for centuries, with the practice deeply ingrained in their culture, making gold a traditional and enduring investment choice for generations; this trend continues today with India remaining one of the world’s largest gold consumers, with the annual consumption being close to 1,000 tonnes.
Interestingly, rural India accounts for 60 per cent of India’s annual gold consumption. In the hinterland, gold is considered an important asset class and now with branded players entering the market, those living in these areas too can fulfil their aspiration of owning a designer piece of jewellery like their urban counterparts. Hence, gold in this vast hinterland is not only playing the role of asset building but also fulfilling the aspiration level of the rural people.
Cherished heirloom
Gold is part of every Indian household and is considered a family heirloom by most Indians. Gold jewellery and ornaments are passed on from generation to generation, in a bid to keep family legacy alive. It is common for most households to pass on jewellery from a mother to a bride at weddings, irrespective of facts like changes in design trends or value. Gold is an extremely sentimental part of our tradition and continues to remain a cherished heirloom.
Gifting gold is considered auspicious in India, with gold gifts forming an integral part of all ceremonies. Gifting gold enables recipients to use it fruitfully, as it is not only a key source of money but is also considered lucky. A gift of gold is perhaps the highest form of gift in the country, showcasing the value of an individual and purity of intent.
There is no bigger status symbol than gold in India. Gold has been a status symbol in India for ages, right from the time of kings and queens to the British and independent India has imbibed the same tradition.
And finally, gold has been considered the safest investment, a sentiment which Indians live by. It is this property of gold as a protector against bad times which have pushed Indians to buy it. Owning gold is considered an extremely smart choice, and is reflected in the amount of gold Indians own. With gold prices on an ever-increasing surge mood, investing in gold makes sense for a secure future.
To sum up, Indians consider gold a super-metal that can provide a solution to multiple things. Not everything that glitters might be gold, but for Indians, gold is their knight in shining armour.
(The author is Chairman of Malabar Group)
