Indian households hold gold worth about $3 trillion, but a large part of it is lying in lockers and is not contributing much to economic growth. Nitin Kamat, co-founder and CEO of stock broking Zerodha, believes that this huge asset can serve the country in a better way.
He said, ‘We have to find better ways to finance gold rather than just limiting it to gold loans.’ Kamat says equity directly funds companies and drives the economy.
Gold vs Equity: Who is ahead in the long term?
Kamat shared a chart showing the comparison of annual returns of gold and Nifty 500 from 1996 to 2025. It is clearly visible that out of 30 years, equities outperformed gold in 24 years.
History shows that both have seen sharp rises and falls. Nifty 500 has given more than 100% returns in many years. 101% in 2003, 105% in 2004 and 91% in 2009. But, there were also big declines of -57% in 2008, -22% in 2001 and -26% in 2011.
Gold continued to give stable but moderate returns. It has grown by 32% in 2011, 27% in 2020, and is projected to grow by 16% in 2024. The year 2020 was special, when both the assets saw growth. 16% in Nifty 500 and 27% in gold.
India’s gold reserves and global comparison
Indian households hold about 25,000 tonnes of gold, the world’s largest domestic reserves and 14% of global gold. Its value is approximately 2.4 trillion dollars. This is 56% of India’s nominal GDP in FY26 and more than total bank credit (55% of GDP).
According to UBS Chief Economist Tanvi Gupta Jain, gold prices may increase further. It may reach $3,500 per ounce in FY26. The price of gold temporarily rose to $3,501 an ounce in April 2025.
HSBC Global also reported that Indian households now hold more gold than the combined reserves of the world’s top 10 central banks. As of December 2024, the Reserve Bank of India had only 876.18 tonnes of gold.