- A 10% rise in gold prices could boost GDP growth/spending by 80 basis points, Jefferies estimates
- Gold-backed loans reached $199 billion by March 2026, aiding wealth effect monetisation
- Jefferies adds Manappuram Finance, Hindustan Zinc, Navin Fluorine, and Meesho to its model portfolio
India's vast household gold holdings could emerge as an unexpected source of economic stimulus as elevated bullion prices boost household wealth and encourage greater monetisation, according to Jefferies' India Equity Strategy report by Mahesh Nandurkar.
Indian households are estimated to hold around $4 trillion worth of gold — roughly four times the money held in stocks. With gold prices having risen sharply and staying above $4,000 an ounce for about a year, the wealth effect could increasingly translate into consumption and economic activity if the rally persists.
Jefferies estimates that a 10% increase in gold prices could generate around 80 basis points of additional GDP growth/spending, although part of this benefit could be offset by a higher current account deficit (CAD) as India imports more gold.
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The report adds Manappuram Finance, Hindustan Zinc, Navin Fluorine and Meesho to Jefferies' model portfolio. Manappuram stands out as a direct beneficiary of accelerating gold monetisation through formal lending channels, while Hindustan Zinc offers exposure to metals amid the broader commodity backdrop.
Jefferies also adds Navin Fluorine, citing its expected earnings growth, while Meesho provides exposure to potential gains in mass-market discretionary consumption.
Other potential beneficiaries of a sustained gold-price surge include jewellers such as Titan and Kalyan, along with MCX and gold-focused lenders including Muthoot Finance and IIFL Finance, according to the brokerage.
Gold loans emerge as key transmission channel
The brokerage sees growing monetisation of household gold through gold-backed loans as an important channel for this wealth effect. Gold loans have grown rapidly, reaching an estimated $199 billion as of March 2026, and now account for a larger share of total bank and NBFC lending.
Jefferies notes that only around 15% of household gold holdings are currently monetised, suggesting substantial headroom if gold prices remain elevated. A further rise in gold prices could therefore support both household wealth and lending activity.
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