Digital gold is growing even faster. Purchases averaged around ₹2,500 crore a month from June to August, and August buying was up 110% from a year earlier. Trading activity picked up too. Average daily gold futures turnover on MCX climbed 38% month on month to about ₹29,500 crore, the highest in five months.
Physical demand, meanwhile, is cooling. India’s gold imports fell to US$2.3 billion in August, down 45% from July and 58% from a year earlier. Domestic prices are trading below import parity, with the discount widening to US$78 an ounce by 11 September, helped in part by customers exchanging old jewellery for new pieces.
The Indian household is not buying less gold. It is buying gold in a different form: units instead of ornaments, holdings instead of making charges.
Why the shift makes sense
Commenting on the shift, Mr. Dinesh Kumar Gurusamy, Founder & CEO, AETRAM GROUP OF COMPANIES said, “Jewellery carries costs that quietly eat into returns: making charges, GST, purity concerns and deductions at resale. A gold ETF unit trades on NSE and BSE, sits in the same demat account as your equities, and can be bought in small quantities. Pricing is transparent and liquidity is exchange-grade. There is portfolio logic as well. Financial planners treat gold as a stabiliser that can cushion a portfolio when equities turn volatile, not as a growth engine.”
The warning signs investors should not ignore
The same data carries a caution. Only about 4,000 new gold ETF folios were opened in August, against an average of around 3.3 lakh a month between January and July, taking total folios to 12.54 million. Existing investors are adding. New ones are hesitating.
That hesitation may be sensible. Wealth managers have flagged recency bias, pointing out that a similar rush into gold followed its January 2026 peak of about ₹1.75 lakh per 10 grams. Prices have already eased. Domestic gold was down 4.6% in September as of the 11th, as expectations around US Federal Reserve policy shifted. Anyone who bought at the August top is, for now, below cost.
Gold pays no dividend or interest. Its returns come entirely from price movement, and prices move in both directions.
A practical framework for Indian investors
Allocation over timing. Treat gold as a fixed share of the portfolio and rebalance periodically, rather than buying in bursts after sharp rallies.
Choose the regulated route. Gold ETFs and gold mutual funds fall under SEBI oversight. Digital gold sold through apps does not, so investors should understand who holds the metal and how redemption works.
Stagger entries. Systematic purchases smooth out swings like the one seen between August and September.
Separate consumption from investment. Buying jewellery for a wedding is a family decision. Buying gold to build wealth is a financial one, and the instruments should be different.
The road ahead
The World Gold Council expects demand to improve through the festive and wedding season, though elevated prices and volatility may keep discretionary buying in check. US interest rates, the dollar and central bank purchases will keep driving global prices, and for Indian investors the rupee adds another variable.
The direction of travel, however, is clear. Gold is moving steadily from the locker into the demat account. Investors who treat it as a hedge rather than a bet stand to benefit most from that shift.
About Aetram Trades
Aetram Trades Private Limited is a Chennai-headquartered brokerage firm offering trading and investment services across Indian financial markets. The company is registered with SEBI (Registration No. INZ000309838) & is also a SEBI Registered Research Analyst (Registration No. INH000024222). The company is also a member of NSE (90356), BSE (6832) and MCX (57110). It is registered with AMFI under ARN-281894. Aetram Trades is a member of MCX and is not a member of NCDEX.
Registered office: No. 113-134, Unit No. 308, 3rd Floor, Beta Wing, Raheja Towers, Anna Salai, Chennai, Tamil Nadu 600002.
Website: www.aetramtrades.in
Disclaimer: Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Brokerage and charges are subject to change and are applicable as per the schedule published on the company website. Currency derivatives are permitted for hedging purposes only, as per prevailing regulatory guidelines.
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