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The traditional love affair between Indians and gold jewelry is witnessing a historic transformation. According to the latest report by the World Gold Council (WGC)for the first time in recent history, Indian investors are prioritizing “Investment Gold”such as gold bars, coins, and Gold ETFs over traditional gold ornaments.

A Historic Pivot in Gold Consumption

For decades, India has been one of the world’s largest consumers of gold, primarily in the form of heavy jewelry for weddings and festivals. However, the data for the recent quarter suggests a massive shift in mindset. Modern Indian buyers are now viewing gold more as a financial asset than a wearable luxury.

The WGC report highlights that the demand for gold bars and coins has surged significantly, while the appetite for jewelry has seen a relative cooling period. This shift is being attributed to the rising awareness of “making charges” and “purity concerns” associated with jewelry, which often eat into the resale value.

The Rise of Gold ETFs and Digital Gold

It’s not just physical bars and coins; Paper Gold and Digital Gold are winning the race. The report indicates a record inflow into Gold Exchange Traded Funds (ETFs). Investors find ETFs more convenient as they eliminate the risks of theft, storage costs, and provide high liquidity. With a single click, investors can now buy or sell gold at transparent market rates, making it a favorite among tech-savvy millennials and Gen Z.

Sky-High Gold Prices: A Major Catalyst

One of the primary reasons behind this behavioral change is the skyrocketing price of gold. As gold touches new all-time highs, the middle class is becoming cautious. Instead of spending on the craftsmanship of jewelry, people prefer putting their hard-earned money into 24-karat gold coins or bars that offer 100% value for money.

Experts believe that the reduction in import duties in the recent budget also played a role in stabilizing the market, encouraging investors to “buy the dip” in the form of pure investment products.

Future Outlook: Will Jewelry Make a Comeback?

While investment gold is currently leading the charts, the World Gold Council notes that the upcoming wedding and festive season (Dhanteras and Diwali) might bring a temporary spike in jewelry demand. However, the long-term trend is clear: India is evolving from a nation of “Gold Wearers” to a nation of “Gold Investors.”

Read More: Investment Shift Why Indians are Ditching Gold Jewelry for Bars, Coins, and ETFs in 2024?