New Delhi [India], January 6 (ANI): India’s household gold stockpile, estimated at around 25,000 tonnes, has quietly emerged as a key macroeconomic stabiliser, providing support to currency stability, financial resilience, and consumption amid global uncertainties, according to IIFL Capital’s Outlook 2026.
The report notes that the market value of household gold now approaches 80% of India’s GDP, reflecting both long-term accumulation and a sharp surge in gold prices over the past year. “Consumption has been bumped up from tax cuts and growth should revert to normal… Indian households have ~25,000 tons of gold, and the proportion used as collateral is very low,” it stated.
In 2025, the Reserve Bank of India (RBI) increased its gold purchases as global gold prices rose sharply. The combination of household gold reserves and RBI purchases helped cushion the rupee against depreciation and strengthened India’s external balance during periods of pressure on foreign portfolio flows.
The report emphasised that only a small fraction of household gold is currently used as collateral, leaving significant potential for growth in gold-backed lending. As banks and non-banking financial companies expand secured lending, this collateral pool can support credit growth without materially increasing systemic risk—especially relevant when unsecured retail lending has shown signs of stress.
Gold-backed credit allows households to smooth spending during downturns without resorting to high-cost borrowing, stabilising consumption when income growth slows. “Substantial economy-level gold collateral makes for strong chances of secured lending growth and household consumption in India. The amount of gold used as collateral is low, thus gold lending can increase,” the report said.
Overall, India’s gold reserves act as a latent capital buffer, available in times of economic stress but largely untapped during periods of growth, reinforcing financial resilience and supporting consumption.
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