New trend in gold demand [ demand rising along side price increase ]–will likely escalate import bill –skew the trade balance and trigger foreien exchange outflows [2] Household savings invested in gold are stockpiled and locked out of the financial system [3] Further useful information is given in the editorial and also suggested are ways to tackle the issue–from long term perspective – Courtey BL

Continued [1] historically, bulk of India’s gold purchases has been from jewellery buyers looking to meet wedding commitments, or to use as collateral during distress. [2] Lately though, Investors have overtaken jewellery buyers as the main drivcer of demand. [3] Until 2024, over 70% gold demand , in volume terms , originated from jewellery buyers, with 30% coming from bar and coin buyers. [4] In 2025, demand from ETFs [ exchange trader funds ], bars / coin buyers and ETF’s picked up to 40% of the total.at 54% actually overtook bars / coins and ETF’s pickpicked up to 40% of the total. [5] In Q1-26 purchases by investors in bars, coins, and ETFs at 54% actually overtook jewellery buying as the main source of bullion demand. [6] Clearly asset investors and consumers are acting in contrary ways. When prices spike , investors buy more . [7] Rather than curb imports — which only pushes the activity underground—enabling remonetisation of the 30000 tonne gold stockpile held by households presents a neat solution. [8] Gold monetisation schemes have failed in the past due to inadequate assaying infrastructure , need to be revived. [9] Remonetisation of gold and its re-use can be incentivised by exmepting them from capital gains tax. In that case, demand from ETFs and jewellers can to an extent be met domestically, without recoourse to imports.