Indian Households Now Own Gold Worth $3.8 Trillion, Nearly 88% of GDP: Morgan Stanley
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Wealth effect from gold holdings is stoked further by lower interest payments due to monetary policy easing and higher disposable income from recent tax cuts, says Morgan Stanley.
Gold in India.
The surge in gold prices has pushed the value of gold owned by Indian households to about $3.8 trillion, nearly 88.8% of the country’s GDP, according to a report by Morgan Stanley released on Friday.
The report noted that the “wealth effect from gold holdings is stoked further by lower interest payments due to monetary policy easing and increased disposable income from recent direct and indirect tax cuts”. The government has recently reduced GST rates and implemented income-tax cuts to boost disposable income and consumption.
Gold prices have soared 61.8% this year to a record Rs 1.27 lakh per 10 grams. The rally has also influenced central bank policy. The Reserve Bank of India has added around 75 tonnes of gold to its reserves since 2024, taking total holdings to 880 tonnes, or about 14% of India’s foreign exchange reserves, the report said.
The composition of household financial savings is also changing. The share of equities in household savings climbed to an all-time high of 15.1% in FY25, up from 8.7% in FY24 and just about 4% before the pandemic. Meanwhile, the share of deposits has slipped to 35% in FY25 from 40% a year ago and 46% pre-pandemic.
Looking ahead, Morgan Stanley expects the share of equities in household portfolios to continue rising, supported by “favourable demographics and increasing investor education”.
Gold’s unbridled rally shows no signs of cooling, with prices in India soaring to around Rs 1.26 lakh per 10 grams and to $4,000 an ounce in the international market. The precious metal has gained over 54% this year, driven by expectations of interest rate cuts, a weaker dollar, strong central bank buying, and ongoing geopolitical tensions.
The 2025 gains for the precious metal are historic, surpassing prior turbulent periods such as after the September 11 terror attacks, the 2008 financial meltdown or even the pandemic. Gold is up 54% so far this year, on track for its best year since 1979, according to FactSet. That was a time when the United States was grappling with double-digit inflation and a full-blown energy crisis.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
October 11, 2025, 16:04 IST
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