Is gold losing its shine? Here's why fewer people are investing in the yellow metal

India Today

16-07-2025

For generations, gold has been every Indian family's trusted treasure. From weddings to festivals, buying gold symbolises pride, wealth and security. But times are changing fast. Many people are now rethinking their age-old love for yellow metal. So, is gold really losing its charm? Let's have a closer look.SKY-HIGH PRICES KEEPING BUYERS AWAYGold prices are hovering close to record highs. Today, at about 9:10 AM, MCX Gold August 5 contracts were up 0.19% at Rs 97,400 per 10 grams.advertisementFor an average middle-class family, even a small piece of gold jewellery now feels like a huge expense. Many people prefer to spend that money on things they can use daily, instead of locking it away in a locker.The price surge has also made investors wary. 'With gold prices at close to an all-time high and with increased volatility, the sentiments remain mixed – while some investors are uncomfortable investing at the elevated price levels, others are looking to make the most of price falls,' says Nilesh D Naik, Head of Investment Products at Share.Market (PhonePe Wealth).
The figures paint a clear picture. According to the World Gold Council, India's jewellery demand fell by nearly 25% year-on-year in the first quarter of 2025. 'The jewellery demand in Q1 2025 was around 71 tonnes compared to an average of 180 tonnes in the previous two quarters,' adds Naik.YOUNG INVESTORS NOW HAVE MORE CHOICESOne big reason for this shift is that younger investors have new choices. Stocks, mutual funds, SIPs and even crypto are pulling them in. 'With the increasing awareness about different asset classes and ease of access, the preference for equities has significantly increased among younger investors,' explains Naik.Many young people feel these options can grow their money faster than gold ever could. Unlike older generations, they don't see gold as the only shield for tough times.According to Santosh Meena, Head of Research, Swastika Investmart Ltd., "The overall outlook for gold remains bullish, driven by rising global uncertainties such as US tariff tensions and growing scepticism towards the US dollar among central banks. The shift in central bank reserves away from the dollar is acting as a major tailwind for gold, reinforcing its status as a safe-haven asset."CHANGING PRIORITIES, CHANGING TRADITIONSBuying gold was once linked to family pride and status. Now, many youngsters see gold jewellery as old-fashioned. They'd rather spend on travel, gadgets or new experiences.While families still buy gold for weddings and special occasions, they are spending less than before.DIGITAL GOLD GAINS GROUNDInterestingly, physical gold may be losing its shine, but paper gold and digital gold are becoming popular. Gold ETFs (exchange-traded funds) and digital gold give people an easy way to invest without worrying about lockers or safety.'There's rising acceptance for gold exposure through products such as gold ETFs/ funds and digital gold among younger investors,' Naik points out.When prices dipped in June, investors didn't waste time. Net inflows in gold ETFs reached a five-month-high, and folios rose by over 40% in a year, from 5.4 million in June 2024 to over 7.6 million in June 2025, Naik quoted.SHOULD YOU BUY, SELL OR HOLD?With gold prices at record highs and volatility in the market, investor sentiment is mixed. "It's better to stick to asset allocation when investing in gold. Gold can be volatile, but it's a good hedge against inflation," Naik advises.He suggests keeping at least 5–10% of your portfolio in gold because it often moves differently from stocks and provides a safety cushion in tough times.GOLD'S SHINE IS CHANGING, NOT FADINGIn the end, gold is not disappearing from Indian households. It still gives comfort when markets fall or inflation eats away savings. But it's clear the way people buy gold is changing.From bangles to bytes, India's gold story is being rewritten, and this time, the locker might just be a smartphone.- Ends