At a time, when the overall demand for gold fell 11% to 710.9 tonnes in 2025, the total value of gold held with Indian households have crossed to a whopping $ 6 trillion.
According to a World Gold Council report released on Thursday, the overall gold demand in the fourth quarter was down by 9% to 241.3 tonnes. Market estimates say that Indian households have around 32,000 tonnes of gold and with the current prices ruling at over Rs 1.75 lakh/10 gm.
The report noted that in the December quarter, jewellery demand dropped 23% to 145.3 tonnes. However, the investment demand increased 26% to 96 tonnes.
Surging Investment Value
The sharp increase in the gold prices, the total investment in gold was Rs 2.97 lakh crore, 73 per cent higher than a year ago, indicating investors’ preference for gold over other investment avenues.
Chirag Mehta, CIO, Quantum AMC, said that there were several reasons for this rising investment demand for gold. For one, expensive valuations in equities a year ago led to phase of consolidation, the Reserve Bank of India interest rate cut led to lowering of deposit rates and underperformance in the real estate sector has led investors to look for gold as an asset class.
“The consistently rising gold prices have only reinforced the fundamental global view and as a better alternative,” he added.
The global uncertainly has only added to this heady mix, as ahigher amount of gold portfolio acts as a hedge for the overall investment portfolio.
The WGC report has said that digital gold purchases grew steadily, with transaction values up almost threefold. It also mentioned that permission for pension funds to invest in gold and silver ETFs is positive for gold.
According to the circular on pension funds regulations, aggregate investment under gold and silver ETFs shall not exceed the 1% of the respective Scheme AUM managed by the Pension Fund.
The combined Assets Under Management (AUM) of the National Pension System (NPS) and Atal Pension Yojana (APY) have crossed the ₹16 lakh crore mark (Oct 25), and the subscriber base has also widened to surpass 9 Crores. At 1 per cent cap, pension funds can invest a total of Rs. 16000 crore in gold and silver ETF.
Record Global Demand
Globally, total gold demand in 2025 exceeded 5,000 tonnes for the first time, totalling 5002 tonnes (including OTC demand) according to the WGC report.
Global investment demand reached a landmark level of 2,175 tonnes following investors seeking safe havens and diversification. Global ETF demand was 801 tonnes, with bar and coin taking demand reaching 1,374 tonnes. Another major contributor to demand was global central banks buying 21 per cent less gold, totalling 863.3 tonnes.
Sachin Jain, Regional CEO, India, World Gold Council, said, “India’s gold market in Q4 2025 clearly reflected the dual impact of record-high prices and shifting consumer behaviour. A fall of 27 per cent in the recycling of gold to 21.7 tonnes, suggesting that consumers are choosing to retain their gold holdings despite record prices. Looking ahead to 2026, we expect Indian gold demand to be in the range of 600-700 tonnes.”
Future Market Optimism
The WGC report is optimistic about gold investment demand. “We see a continuation of the investment-friendly environment as we head into 2026, given the unpredictable and volatile geopolitical environment alongside continued forces of softer growth and accommodative policy.”
The report highlighted several reasons for its optimism. Falling real rates in the US, historic low levels of Credit spreads, rising bond volatility, elevated geopolitical risk and an expensive US dollar on a Real Effective Exchange Rate (REER) basis are reasons to support gold, it stated.
• Investors preferred gold to equity, real estate and FDs
• Digital gold growing: transaction value tripled
• Pension fund eligible to invest Rs.16,000 cr in gold-silver ETFs
• Annual gold demand down 11 per cent to 710.9 tonnes
• Expensive US Dollar in REER terms conducive to precious metals.