Buying More, Wearing Less: How India’s Diwali Gold Rush is Changing in 2025
New Delhi – The streets of Delhi’s bustling Lajpat Nagar shimmer with lights, garlands, and the familiar glow of gold. Ahead of Diwali, one of India’s most significant festivals, jewellery shops here are overflowing — not just with stock, but with people. But this year, there’s a twist in the tale of India’s age-old gold obsession.
Despite gold prices soaring to a staggering $1,440 (₹1.2 lakh) per 10 grams, Indians are far from abandoning tradition. They’re simply adapting.
💰 Price Shock, But Not a Demand Collapse
Gold and silver prices have surged — up by 60% and 70% respectively — marking historic highs. But instead of retreating, buyers are recalibrating.
“People are not saying ‘I won’t buy gold’,” says Tanishq Gupta, a jeweller in Delhi. “They’re saying ‘I’ll buy a little less’.”
Jewellery houses have taken note. Thinner coins, lightweight ornaments, and cleverly designed pieces that appear heavy but contain less gold are now the new festive staples. For as little as $35, shoppers can walk away with a coin made of just 250mg of gold — or even smaller ones weighing 25mg.
🎯 From Ornament to Investment
This Diwali, gold is increasingly being treated not just as jewellery, but as an investment asset. According to the World Gold Council (WGC), jewellery’s share of India’s gold demand dropped from 80% in Q2 2023 to 64% this year, while investment-driven demand — bars, coins, and digital gold — rose sharply from 19% to 35%.
“We’re seeing more customers come in for gold coins and ETFs than bangles or necklaces,” confirms Pushpinder Chauhan, another retailer in the capital.
Digital platforms are also witnessing a surge. September 2025 saw record inflows into gold exchange-traded funds (ETFs), and ETF assets under management have grown over 70% this year alone.
🏦 RBI’s Golden Strategy
It’s not just households doubling down on gold. The Reserve Bank of India (RBI) has quietly become one of the world’s largest institutional buyers of the metal. Gold now accounts for 14% of India’s foreign exchange reserves, up from 9% in 2022.
According to analysts, the central bank is using gold to hedge against global volatility, reduce reliance on the US dollar, and inject long-term stability into India’s financial architecture.
“India has become a major pillar of global gold demand,” notes Kaynat Chainwala, a commodity expert at Kotak Securities.
👰 Cultural Pull Meets Economic Caution
For Bhavna, a bride-to-be shopping in Delhi, the prices have created a dilemma. “I’m waiting for prices to drop a little. I can’t afford what I had planned earlier,” she says.
She’s not alone. While the affluent classes continue to buy, middle and lower-income families are thinking twice — or postponing altogether.
“The volume may fall, but in rupee terms, value demand will stay strong,” explains Madan Sabnavis, chief economist at the state-run Bank of Baroda.
📈 India’s $3.8 Trillion Gold Stash
India’s infatuation with gold isn’t just emotional — it’s also economic. According to Morgan Stanley, Indian households hold an estimated $3.8 trillion in gold, equivalent to nearly 89% of the country’s GDP. That’s more than just wealth — it’s security.
Economists say this gold cushion is helping Indian families navigate a tough economic climate marked by slowing growth and tight job markets.
“High gold prices are actually increasing household net worth,” wrote Morgan Stanley analysts Upasana Chachra and Bani Gambhir, citing reduced interest payments and higher disposable income due to tax cuts.
✨ The Glitter Endures
So, what’s changed this Diwali? Not the desire for gold — just the form. Coins over bangles. Digital over physical. Investment over indulgence.
While record-high prices may have dampened some of the festive sparkle, India’s timeless bond with gold remains unbroken.
As the wedding and festive seasons roll on, jewellers expect the rush to continue — with a few creative adaptations along the way.
Published by: kilatnews.id
Category: Business / Culture / India / Markets
Tags: #Diwali2025 #GoldPrices #IndiaGoldRush #GoldJewellery #DigitalGold #RBI #WorldGoldCouncil
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