Indian households hold $3.8 trillion worth gold, nearly 89% of GDP — Here's how

Indian households have witnessed a sharp jump in their overall wealth, driven by a sharp surge in the price of gold, with total holdings now valued at around $3.8 trillion, nearly 89 per cent of the country’s GDP, according to a Morgan Stanley report.

The report indicated that the surge in household wealth has also been bolstered by reduced interest payments after recent monetary policy easing, and an increase in disposable income due to tax cuts, according to a report by The Economic Times.

It added that the latest GST reductions, along with income-tax cuts announced earlier this year, were aimed at raising individual incomes. Gold prices have soared 61.8 per cent this year, hitting a record high of Rs 1.27 lakh per 10 grams.

Gold reserves rise to around 14% of foreign exchange reserves

Since 2024, the Reserve Bank of India has also spiked its gold reserves by around 75 tonnes, taking total holdings to 880 tonnes, which is around 14 per cent of the foreign exchange reserves of the country.

Household investments are also shifting, with equities now making up a record 15.1% of financial savings in FY25, up from 8.7% in FY24 and just 4% before the pandemic.

Meanwhile, the share of deposits has fallen to 35%, down from 40% in FY24 and 46% pre-pandemic, according to ET. Morgan Stanley expects this trend to continue, predicting that equities will play an even bigger role in household savings, supported by a younger population and growing awareness of investment options.

Meanwhile, on Wednesday, Gold futures rose 1.8 per cent to $4,218.29 per ounce. For the first time ever, gold breached the $4,200 mark, extending its rally to nearly 60 per cent so far in 2025. As per the data from GoodReturns, ten grams of 24-carat gold traded at Rs 1,28,360 after gaining Rs 10 in early trade, while silver prices surged by Rs 100 to Rs 1,89,100 per kilogram.