50% of gold demand originates at India’s middle class

Many international companies regard India as a key strategic market. At the heart of their ambitions is the Indian middle class, which has expanded from 150mn in 2010 to an estimated 350mn in 2021. Given India’s economic trajectory and young demographic this number will likely rise going forward.

Considering the size of the middle class in India it is not a surprise that 50% of gold demand originates here. This is backed by the IGPC-IIMA household survey, which concluded that in 2020 about 51% of gold demand stemmed from consumers with incomes between Rs200,000 and Rs1mn per annum.

For those with incomes above Rs1mn the share was just 19%. On the other hand, consumers with an income below Rs200,000 were responsible for 30% of gold demand. Consumers with an income above Rs1mn hold a large proportion of their investment in equity markets and real estate.

Another interesting insight from the same survey was that over half of the middle class owned gold. In contrast, the percentage for higher income groups was just 17%, while about 32% of low-income households owned gold.

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