The sharp rise in gold prices over the past two years could provide an underappreciated boost to India’s economy by increasing household wealth and creating greater scope for gold-backed borrowing, according to brokerage Jefferies cited in a report by Moneycontrol.
As per the report, the brokerage estimates Indian households collectively own around 25,000 tonnes of gold, valued at approximately $3.9 trillion as of March 2026. This represents an increase of about $1.9 trillion in two years and is nearly four times the value of household equity holdings.
Gold’s Growing Share of Household Wealth
Gold accounted for an estimated 24.2% of Indian household assets in March 2026, up from 15.4% in March 2023. During the same period, total household wealth increased from $11.3 trillion to $16 trillion.
Property’s share declined from 51.3% to 47.6%, while bank deposits fell from 14.1% to 11.2%. Meanwhile, the share held in equities remained broadly stable. Investment through gold exchange-traded funds has also expanded, with assets rising from $2.8 billion in March 2023 to $18.1 billion in July 2026.
Gold Loans Could Unlock Economic Benefits
Jefferies said gold is increasingly being used to obtain credit. Organised gold-loan assets under management reached around $197 billion in March 2026, up 73% over two years. Such lending now represents about 7% of combined bank and NBFC credit.
However, the brokerage estimates only around 15% of household gold is currently monetised through formal or informal lending channels. A rise in this ratio could generate an additional $15-20 billion in gold loans annually over the next two years.
Jefferies estimates that another 10% increase in gold prices could add approximately $400 billion to household wealth and generate a further $20-25 billion in gold loans. Combined, these effects could provide an estimated 80-100 basis-point tailwind to GDP and consumer spending.
The brokerage expects gold prices to remain supported by fiscal pressures in the US and Japan, which could limit the ability of their central banks to raise interest rates aggressively.
