Indian households now hold more gold than the combined reserves of the top 10 central banks worldwide, according to a study by HSBC Global. With a staggering 25,000 tonnes of gold, Indian families surpass even the United States, which leads global central bank reserves with 8,133 tonnes. Meanwhile, the Reserve Bank of India holds significantly less, at 876.18 tonnes as of December 2024.
India’s long-standing cultural and economic reliance on gold has reached an astonishing milestone. According to a study by HSBC Global, Indian households collectively hold 25,000 tonnes of gold—more than the total gold reserves of the world’s top 10 central banks combined. This highlights India’s deep-rooted preference for gold as a store of value and investment tool.
The United States leads in official gold reserves among central banks, holding approximately 8,133 tonnes. Following closely are Germany with 3,300 tonnes, and other nations including Italy, France, Russia, China, Switzerland, India, Japan, and Turkey. However, India’s Reserve Bank of India (RBI) holds only 876.18 tonnes as of December 2024, making household gold reserves vastly superior.
Gold as a Preferred Investment in India
Gold plays a crucial role in Indian households, not just as an ornament but as a safe-haven asset. It is widely used during weddings, religious ceremonies, and as an investment against economic uncertainty. Unlike Western countries that rely on stocks, real estate, and bonds, many Indian families continue to prefer gold for wealth preservation.
Experts attribute this phenomenon to factors such as inflation concerns, lack of robust social security, and a traditional mindset that views gold as a symbol of prosperity and financial security. The high demand for gold in India also influences global gold prices, making the country one of the world’s largest consumers of the precious metal.
While household gold accumulation signifies financial security for individuals, it presents economic challenges for India. The country imports large quantities of gold, increasing the trade deficit and putting pressure on foreign exchange reserves. To counter this, the Indian government has introduced gold monetization schemes, encouraging people to deposit their gold in banks in exchange for interest. However, these schemes have seen limited success, as most families are reluctant to part with their gold.
With the HSBC Global study shedding light on India’s gold reserves, policymakers may need to consider new strategies to leverage these vast private holdings for economic growth while preserving the cultural significance of gold for Indian households.
