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Economic Times
2 days ago
- Business
- Economic Times
$2.4 trillion worth of gold! India's household hoard is 6x Pakistan's economy
Indian households hold an estimated 25,000 tonnes of gold worth $2.4 trillion—nearly six times Pakistan's GDP and greater than Italy's economy. Despite monetisation challenges, high prices and strong demand keep gold central to Indian wealth. UBS projects stable demand and rising prices, boosting savings and gold-backed lending. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads India's gold obsession isn't just cultural—it's a display of household wealth on a global scale. Indian households, including temples, collectively hold around 25,000 tonnes of gold, valued at approximately $2.4 trillion at current market prices, according to the World Gold Council (WGC). That's nearly 56% of India's projected FY26 nominal put that in perspective, Pakistan's entire economy is worth around $411 billion, according to IMF estimates for FY25. This means India's private gold holdings are nearly six times larger than Pakistan's GDP. In fact, the value of gold held by Indian households is greater than the GDP of developed countries like Italy ($2.4 trillion) and Canada ($2.33 trillion).According to UBS, gold prices have doubled since FY20, significantly boosting Indian household wealth. The bank forecasts prices to rise further to $3,500 per ounce by 2026, driven by global uncertainties such as trade tensions, inflation, and geopolitical risks. While UBS expects gold volume demand in India to soften in FY26, high prices will keep net imports elevated at $55–60 billion, or about 1.2% of record prices, gold demand in India held up well in FY25, with consumer demand at 782 tonnes—15% above the pre-pandemic average. Jewellery demand softened slightly, but retail investment in gold bars and coins jumped 25% YoY, supported by a cut in customs duty from 15% to 6% in ahead, UBS projects gold demand to moderate to 725 tonnes in FY26, before recovering to 800 tonnes in FY27 as household consumption stabilises. A key factor behind this recovery could be a $55 billion pay boost expected from the 8th Central Pay Commission, which tends to increase physical savings—particularly in real estate and India's gold reserves are impressive, efforts to monetise this wealth have largely fallen short. UBS notes that less than 2% of household gold is used as collateral for loans, despite attempts by banks and NBFCs to expand in this segment. Bajaj Finance Shriram Finance , and Chola are among the financial firms increasing their exposure to gold-backed lending. However, structural barriers—such as emotional attachment to gold jewellery—have limited the success of initiatives like the Gold Monetization Scheme (GMS) and Sovereign Gold Bonds (SGBs). UBS also points out that SGBs were discontinued in February 2024, partly due to rising gold prices and growing liabilities for the said, India's current account deficit remains manageable, despite the heavy import burden of gold. UBS attributes this to buffers built post-pandemic, including a strong services trade surplus and robust remittance flows, which help offset gold-related 14% of the world's private gold stock, India continues to be the largest private holder of gold globally. As UBS puts it, Indian households are not just sentimentally attached to gold—they're growing wealthier because of it. And in a world of uncertainty, India's age-old trust in gold seems to be paying off.
Time of India
2 days ago
- Business
- Time of India
$2.4 trillion worth of gold! India's household hoard is 6x Pakistan's economy
India's gold obsession isn't just cultural—it's a display of household wealth on a global scale. Indian households, including temples, collectively hold around 25,000 tonnes of gold, valued at approximately $2.4 trillion at current market prices, according to the World Gold Council (WGC). That's nearly 56% of India's projected FY26 nominal GDP. To put that in perspective, Pakistan's entire economy is worth around $411 billion, according to IMF estimates for FY25. This means India's private gold holdings are nearly six times larger than Pakistan's GDP. In fact, the value of gold held by Indian households is greater than the GDP of developed countries like Italy ($2.4 trillion) and Canada ($2.33 trillion). According to UBS, gold prices have doubled since FY20, significantly boosting Indian household wealth. The bank forecasts prices to rise further to $3,500 per ounce by 2026, driven by global uncertainties such as trade tensions, inflation, and geopolitical risks. While UBS expects gold volume demand in India to soften in FY26, high prices will keep net imports elevated at $55–60 billion, or about 1.2% of GDP. Despite record prices, gold demand in India held up well in FY25, with consumer demand at 782 tonnes—15% above the pre-pandemic average. Jewellery demand softened slightly, but retail investment in gold bars and coins jumped 25% YoY, supported by a cut in customs duty from 15% to 6% in mid-2024. Looking ahead, UBS projects gold demand to moderate to 725 tonnes in FY26, before recovering to 800 tonnes in FY27 as household consumption stabilises. A key factor behind this recovery could be a $55 billion pay boost expected from the 8th Central Pay Commission, which tends to increase physical savings—particularly in real estate and gold. Live Events While India's gold reserves are impressive, efforts to monetise this wealth have largely fallen short. UBS notes that less than 2% of household gold is used as collateral for loans, despite attempts by banks and NBFCs to expand in this segment. Bajaj Finance , Shriram Finance , and Chola are among the financial firms increasing their exposure to gold-backed lending. However, structural barriers—such as emotional attachment to gold jewellery—have limited the success of initiatives like the Gold Monetization Scheme (GMS) and Sovereign Gold Bonds (SGBs). UBS also points out that SGBs were discontinued in February 2024, partly due to rising gold prices and growing liabilities for the government. That said, India's current account deficit remains manageable, despite the heavy import burden of gold. UBS attributes this to buffers built post-pandemic, including a strong services trade surplus and robust remittance flows, which help offset gold-related outflows. Also Read: IT stocks up 35% in less than 2 months. Can it withstand Fed caution and geopolitical risk? With 14% of the world's private gold stock, India continues to be the largest private holder of gold globally. As UBS puts it, Indian households are not just sentimentally attached to gold—they're growing wealthier because of it. And in a world of uncertainty, India's age-old trust in gold seems to be paying off.
Time of India
5 days ago
- Business
- Time of India
Gold set to gain share in forex reserves as dollar outlook dims: WGC
Gold reserves: A World Gold Council survey shows nearly half of central banks plan to boost gold reserves amid geopolitical risks. Gold may outpace the US dollar, with growing preference for safer, non-dollar assets including yuan and euro. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Gold could eat into the share of the US dollar in central bank forex holdings worldwide over the next five years, an annual World Gold Council (WGC) survey showed, underscoring a broad-based tilt toward safe-haven assets in a trading environment rocked by geopolitics and unpredictable trade tariffs. The yuan and the euro, too, might see share gains that reflect the shifting trade currents.'Nearly half of the central bank respondents intend to increase their own gold holdings in the coming year,' said Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific (ex-China). 'This is remarkable, especially considering how many record-high prices we've hit so far in 2025.'Gold prices have continued to surge through this year, in part aided by institutional purchases, after a record 2024 surge.'Notably, this reflects the current global financial and geopolitical environments,' Shaokai Fan said. 'Gold remains a strategic asset as the world faces uncertainty and tumult. Central banks are concerned about interest rates, inflation, and instability – all reasons to turn to gold to mitigate risk.'Central banks have bulked up gold holdings in recent years amid geopolitical and economic uncertainty. WCG said that central banks accumulated over 1,000 tonne of gold in each of the last three years, up significantly from the average 400-500 tonne over the preceding to the survey, which collected data from 73 of the world's central banks, were less sanguine about the prospects of the US dollar, which still is the world's reserve currency and the monetary unit in which goods are priced survey also revealed that 95% of respondents believe that global central bank gold reserves will increase over the next 12 months. This is a record high since it was first tracked in the 2019 survey and represents a 17% increase from the 2024 findings, WGC the American currency dollar maintains its position as the dominant global reserve currency, data from the International Monetary Fund's Currency Composition of Official Foreign Exchange Reserves (COFER) shows that the dollar's share has been on a gradual decline.'The majority of respondents (73%) see moderate or significantly lower US dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi, as well as gold, will increase over the same period,' the WCG survey said. Bank of Baroda May report, based on the WGC data, had shown that the gold holding by central banks climbed 4.1% annually between 2009 and top 10 holders are the US, Germany, Italy, France, Switzerland, Japan, Netherlands, China, Russia, and India.
Yahoo
6 days ago
- Business
- Yahoo
Central banks expect to swap out more of their U.S. dollar reserves for gold as greenback's safe-haven status weakens
Central banks from the Global South are actively shifting their own reserves toward gold at a much faster rate than advanced economies to reduce their exposure to the U.S. dollar amid growing trade protectionism, according to a survey by the World Gold Council. 'The recent market developments around tariffs have raised questions on the safe-haven status of USD/UST, but have bolstered that of gold,' one response read. Roughly every second central bank in the Global South plans to expand its own gold reserves over the coming 12 months, new data shows, and the currency most likely to pay the price for the shift is the U.S. dollar. Results from the Central Bank Gold Reserves Survey 2025 published on Tuesday by the World Gold Council (WGC) found geopolitical instability and potential trade conflicts as chief reasons why emerging economies are shifting toward gold at a much faster rate than advanced economies. Asked more broadly about their expectations regarding how their international peers will behave in the coming 12 months, there was near unanimity regardless of the country of origin. Of the 15 central banks from advanced economies and 58 central banks from emerging markets and dynamic economies, or EMDE, polled, 95% expected overall gold reserves to increase in the next 12 months. This helps explain why the precious metal—despite its lack of a yield versus other assets as well its physical storage costs—touched $3,446 an ounce, close to its April record, while the U.S. dollar index is near three-year lows. 'The uncertainty stemming from the tariffs implemented and committed by the USA regarding trade policies in the recent period may reduce the interest in USD and USD-denominated assets as a reserve currency,' one anonymous central bank is quoted as saying in the report. Of all institutions polled, 48% of those in the Global South expected their own gold reserves to grow in the immediate future versus just 21% in advanced economies. Respondents argued the de-dollarization trend that favors a shift to gold would continue owing to increased tariffs and trade protectionism, but any decline would likely be gradual as a result of the U.S.'s deep financial markets, comparatively strong legal institutions, and the lack of any obvious substitute. In 2024, central banks bought 1,045 metric tons of gold, accounting for about a fifth of global demand. This marked the third straight year during which they accumulated over 1,000 tons, according to figures from the WGC, up sharply from the 400- to 500-ton average over the preceding decade. According to the survey, 72% of all respondents believe gold reserves held by the world's central banks will increase moderately over the next five years versus 66% the previous year. Another 4% of respondents, coming entirely from non-advanced economies, predict the gain will be even be significant, up 1 percentage point from before. 'Central banks are expected to continue purchasing gold as they look for ways to reduce dependence on USD,' one central bank replied in the survey. 'The recent market developments around tariffs have raised questions on the safe-haven status of USD/UST, but have bolstered that of gold.' By comparison, 45% expect a moderate drop in U.S. dollar holdings over the same time period. While this represents an improvement over the 49% a year earlier, the number replying dollars would see a significant decline soared—to 28% from 13% previously. The sharpest divergencies in responses between advanced economies and the Global South related to the trend of de-dollarization and how great a role geopolitical tensions play in fueling it. When asked how much of total global reserves would still be denominated in dollars five years from now, more central banks from non advanced economies anticipated a slight decrease from the current 43% share than their peers in advanced economies. For comparison, gold accounted for only 19% of total reserves, with 15% allocated in euros and 2% in Chinese renminbi. Among those that expected no change in the share of dollar-denominated reserves, the relationship was flipped: far more advanced economies believed this to be the case than those elsewhere. 'This resonates with the recent trend in reported central bank holdings, where we see a stronger appetite for gold accumulation from [emerging markets and dynamic economies] central banks,' the World Gold Council concluded. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
6 days ago
- Business
- Business Insider
7 African central banks with the largest gold reserves (Q1, 2025)
Gold reserves have long been a cornerstone of central bank financial strategies worldwide, and African nations are no exception. Amid ongoing global economic uncertainty, evolving monetary policies, and the need for more diversified reserve assets, many African central banks have been steadily increasing their gold reserves. Gold remains a critical asset for central banks globally due to its stability, liquidity, and consistent returns. Many African central banks are increasing gold reserves to diversify assets and manage economic volatility. As of Q1 2025, North African countries lead gold holdings in Africa, with Algeria at the forefront. These gold reserves act as a safeguard against currency volatility and help build investor confidence, a factor crucial in regions often exposed to external financial shocks. According to the World Gold Council (WGC), gold's unique combination of safety, liquidity, and steady returns, the three key investment objectives for central banks, makes it a vital component of national reserves. Today, central banks collectively hold about one-fifth of all the gold ever mined, underscoring gold's enduring value as both a strategic asset and a symbol of monetary stability. For Africa's leading reserve holders, gold continues to play a pivotal role in enhancing economic resilience and reinforcing financial credibility on the global stage. Gold hits historic highs Gold has reached several record highs this year, surpassing $3,500 per ounce in April as investors flocked to safe-haven assets following President Donald Trump's criticism of Federal Reserve Chair Jerome Powell. According to a report by the European Central Bank, globally, central banks purchased over 1,000 tonnes of gold last year—twice the average of the previous decade. Global gold reserves held by central banks rose to 36,000 metric tons in 2024, nearing the all-time high of 38,000 tons recorded 60 years ago. A survey conducted by the WGC found that two-thirds of central banks bought gold to diversify portfolios, while around 20% cited protection from geopolitical and economic risks, including Russia's invasion of Ukraine. Africa accelerates gold drive For many African economies, gold reserves are a way to strengthen monetary sovereignty and reduce reliance on foreign currencies. Countries like South Sudan, Zimbabwe, and Nigeria are expanding their reserves, aligning with global trends seen in China and India. The WGC survey further disclosed that around 20 central banks plan to increase gold holdings this year. In Africa, top reserve holders are often resource-rich or gold-producing nations. Gold not only serves as a store of value but also provides central banks with greater flexibility during economic shocks, making it a key asset for financial stability. According to the latest WGC report, the table below shows the African countries with the largest gold reserves as of Q1 2025. Rank Country Gold Reserves Tonnes 1 Algeria 173.56 2 Libya 146.65 3 Egypt 128.00 4 Ghana 31.01 5 Mauritius 12.42 6 Tunisia 6.84 7 Kenya 0.02 As of Q1 2025, Algeria's central bank holds the largest gold reserves in Africa, with 173.56 tonnes, followed by Libya and Egypt with 146.65 and 128 tonnes respectively. These North African nations have historically maintained strong gold positions as part of their monetary strategy. Ghana, the highest-ranking sub-Saharan country, holds 31.01 tonnes, reflecting its role as one of Africa's top gold producers.
