Indian Gold Investments Jump 60% In 2024 To Rs 1.5 Lakh Crore: World Gold Council

Gold investments in India soared by 60% in value terms to $18 billion, or approximately Rs 1.5 lakh crore in 2024, as compared to 2023, according to a report released by the World Gold Council on Wednesday.

In absolute terms, the demand for gold as investment stood at 239 tonnes in India, which is the "highest since 2013", WGC stated. This is 29% higher as compared to 185 tonnes in 2023.

Indian gold investment remained strong in the October-December quarter at 76 tonnes, almost matching the performance of the July-September quarter, the report added.

At 239 tonnes, India's annual demand for gold as an instrument of investment accounted for 20% of the global demand in this segment at 1,180 tonnes, as per the data shared in the report.

The global investment demand for gold is up 25% in absolute terms, as compared to 945.5 tonnes in 2023.

As with most other markets, investment demand was cemented by gold’s price rise throughout the year. Prices swiftly resumed their upward march following the July duty cut, and a subsequent correction in November attracted bargain hunting investors keen to add to their holdings at a lower price, WGC said.

The auspicious festival period of Dhanteras and Diwali in October-November spurred buying during the final quarter, it added. This was boosted further in the big metropolitan cities by "e-commerce platforms offering super-quick delivery" of small gold investment bars and coins, sometimes in as little as 10-15 minutes, the report pointed out.

Also working in gold’s favour was the relatively lacklustre performance of other assets, with domestic stock markets "generating mediocre returns" in the first half of 2024 and ending the year with a notable downward correction, after touching record highs in the third quarter, it added.

"We expect the trend of healthy investment demand in India to continue in 2025, with investment interest in gold broadening to include gold ETFs and mutual funds. An extension of gold’s recent strength would likely fuel continued strong investment interest in gold," WGC further said.

Gold ETFs had a sizable impact globally in 2024, as it marked the first year since 2020, in which holdings were marginally unchanged, in contrast to the heavy outflows of the prior three years. The net outflow was of 7 tonnes, which was starkly lower as compared to 244 tonnes in 2023, WGC said.

After sinking to a four-year low of 3,080 tonnes in April, global holdings of gold ETFs recovered throughout the remainder of 2024, with the exception of a slight November dip, the report noted.

"Heightened geopolitical uncertainties, shifting expectations of the future path of interest rates, and the strongest annual gold price performance since 2010 were all key drivers of the annual increase," it said.

In 2025, ETF investors will likely drive demand for gold investment, with economic uncertainty supporting gold’s role as a risk hedge, the council further said.