In May 2026, Prime Minister Narendra Modi made a public appeal that surprised many: he asked Indians to stop buying gold for at least a year. His reasoning was economic: India's foreign exchange reserves had slipped from \(728.5 billion in February to \)690.69 billion by May, partly under pressure from the US-Israel-Iran conflict driving energy prices up. Since India spent $72 billion on gold imports in 2025-26 alone, every gram purchased widens the current account deficit.
It was a reasonable macroeconomic argument. And yet, history suggests it won't work. For Indians, gold isn't just a commodity. It's a belief system, and the data backs that up.
India's Gold Demand: The Numbers Tell the Story
India is the world's second-largest consumer of gold. Even as prices hit record highs, demand has remained remarkably resilient. According to the World Gold Council, the following numbers give a full picture of India’s gold demand:
Year | Demand (Tonnes) | Total Value | Key Driver |
2023 | 761 tonnes | ₹3,92,000 crore | Wedding & festival buying |
2024 | 802.8 tonnes | ₹5,15,390 crore | Import duty cut + weddings |
2025 | 700–800 tonnes | — | High prices dampened jewellery; investment demand rose |
Q1 2026 | 151 tonnes | ₹2,275 billion (record) | Investment demand up 54% y/y |
Source: World Gold Council
The numbers tell an interesting story. In the first quarter of 2026, Indian gold demand totalled a record ₹2.27 lakh crore, almost double what they spent a year earlier. Demand for gold as an investment jumped 54%, showing that more people were buying gold to build wealth, not just for jewellery.
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What Affects Gold Prices And Why Uncertainty Pushes Them Higher
To understand what affects gold prices, look at the forces driving global uncertainty: interest rates, inflation, the US dollar, and geopolitical events. When instability strikes, gold rises, not by coincidence but by design. It has no counterparty risk. It cannot default or be printed into worthlessness.
The Iran conflict in 2026 is the latest example. As energy prices spiked and the rupee weakened, Indian investors did what instinct told them: they moved toward gold. Gold price fluctuations during crises aren't a deterrent for Indian buyers, they're often the trigger.
Crisis / Event | Gold Performance (INR terms) |
2008 Global Financial Crisis | More than doubled over 3 years |
2013 Rupee Crisis | Rose ~20% as rupee weakened sharply |
COVID-19 (2020) | Rose ~28% in a single year |
2024–25 Geopolitical Tensions | Rose ~21% in 2024; hit ₹1 lakh per 10g in 2025 |
Iran Conflict (2026) | Continued upward pressure; investment demand surged |
Source: Historical gold price data, World Gold Council.
The Shift Toward Online Gold Investment in India
How Indians buy gold has changed significantly. Online gold investment in India now spans digital gold platforms, gold ETFs, and SIPs. Gold ETFs hit record highs in early 2026, with ETF demand in January alone accounting for 16% of monthly imports.
Investing in a gold SIP has become particularly popular among younger, salaried investors. Rather than a lump sum, they invest a fixed amount monthly — ₹1,000 or ₹5,000 — accumulating gold weight gradually across different price points. This removes the anxiety of timing the market and makes gold as an investment accessible to households who can't buy in bulk.
Online gold purchase in India has effectively democratised an asset class that was once tied to physical jewellery stores, festivals, and inherited wealth.
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Putting Idle Gold to Work: Where myGold Comes In
India holds an estimated 25,000 tonnes of gold in household lockers. Most of it sits completely idle, earning nothing. This is where gold leasing changes the equation and myGold is the first platform in India that makes both physical and digital gold leasing possible for individual investors.
Physical Gold Leasing is for gold you already own: Jewellery, coins, or bars sitting unused in a locker. You bring it to myGold, it gets evaluated and converted to its 24 karat equivalent weight, and then leased to jewellers who put it to productive use within the gold industry. Your original gold stays yours. At the end of the lease, it comes back — along with the extra grams you've earned as rental income.
Digital Gold Leasing: This works for gold you buy on the myGold platform through a one-time purchase or a monthly SIP. You can invest in gold SIP using the autopay option, which is available on a daily, weekly or monthly basis. As soon as digital gold is purchased, leasing starts working, and your gold starts earning additional gold weight. There's no waiting, no logistics, no locker required. It's gold working for you from day one.
Here's what makes myGold worth trusting. Every lease is backed by a formal agreement on legal stamp paper, and there is no lock-in period, so you can withdraw whenever you choose. All gold is evaluated transparently at its 24-karat equivalent and tracked in real time through the myGold app. Most importantly, you can earn up to 5% per annum in additional gold weight while retaining complete ownership of your gold throughout the leasing period. Every milligram of gold weight is fully insured, giving you added peace of mind as your holdings grow.
Bottom Line
The real problem isn't that Indians buy too much gold, it's that the gold they buy goes straight into lockers and stays there, economically inert. It's imported, paid for in dollars, and then locked away for years, contributing nothing to the productive economy.
Gold leasing flips this on its head. When idle gold re-enters circulation through the industry, going to jewellers and manufacturers who actually use it, it stays within India's economic ecosystem. The gold that was once dead weight becomes active capital. Dollars were already spent importing it. The least it can do now is work.
Indians don't need to stop buying gold. They need to stop letting it sit idle. And that's a problem myGold solves. Check out myGold to know how leasing works.
FAQs
1. Why do people buy gold during uncertainty?
People often buy gold during periods of uncertainty because it is viewed as a store of value that can help preserve wealth when markets are volatile.
2. Is gold a good investment during economic uncertainty?
Gold has historically been considered a defensive asset, and many investors use it to diversify their portfolios during economic or market uncertainty.
3. How does gold perform during economic downturns?
Gold often holds its value or attracts increased investor interest during economic downturns, though its performance can vary depending on market conditions.
4. Why do Indian households continue to accumulate gold across generations?
For many Indian families, gold serves multiple purposes: as a store of wealth, a financial safety net, a cultural asset, and an investment that can be passed down through generations.
