A Golden Bond

ON AN OVERCAST afternoon in Ben­galuru’s Jayanagar, the gold showroom is quietly busy. A mother and daughter stand at the counter—Sarala Gowda, a government school teacher in her late forties, and Kavya, who has just cleared her PUC and is waiting for ad­mission to college. Sarala has been putting aside ₹8,000 per month for a year through a gold savings scheme, and today they have come to choose the chain. Not too thick, not too plain—something Kavya can wear daily but that will also, in Sarala’s words, “stay with her”. The salesman lays out designs on a tray. Behind them, the gold rate flickers on a red digital board—₹8,945 per gram—but no one looks up. The price is a condition, not a deterrent. What matters is the act: the comple­tion of a year-long promise, the placing of value on the neck of a daughter before she steps into the next chapter of her life.

Gold, that most unyielding of metaphors—for permanence, prosperity, tradition—has refused to go the way of every other as­set in modern India. It is not digitally disrupted. And it has not, de­spite all attempts to coax it into vaults, banks or apps, abandoned its grip on the South Indian imagination. Since early 2024, gold prices have staged a defiant ascent. Global instability, inflation anxiety, and the slow, inflationary tailwinds of America’s second Trump presidency have all conspired to make gold the ballast of choice for investors, central banks and households. The price per 10 grams of 24k gold in India is now inching ever closer to ₹1,00,00. But demand, far from softening, has stiffened into resolve.

In the fiscal year 2024-25, India imported approximately 757.15 tonnes of gold, a slight decrease from 795.32 tonnes the previous year. Much of this never left personal lockers in Tamil Nadu, Kerala and Andhra Pradesh where the cultural case for gold has long superseded the economic one. It is said that Rome’s most ruinous deficit was with the Tamil kings of antiquity. Ro­man gold coins, still occasionally plucked from South Indian soil after monsoon rains, were traded for spices, peacocks and fine cotton. By the 1st century CE, complaints rang out from Roman senators about gold draining eastward. The drain never stopped.

Across two millennia, the Tamil, Telugu and Malayali obses­sion with gold has survived colonialism, nationalism and neolib­eralism. Weddings remain gold-drenched. Newborns are marked with golden bracelets. On Akshaya Tritiya, jewellers open at 5AM, queues snake around blocks, and even the tightest-fisted families buy at least a coin. It would be unlucky not to.

No less than 300 grams of gold now adorn the average South Indian bride. It is not mere ostentation. It is inheritance, personal capital and social contract rolled into one gleaming collarbone display. In Kerala, gold is still spoken of in the female possessive: her ornaments, her reserve, her dignity. And in Tamil Nadu, the idea that one would not give a daughter a proper bridal allotment of gold is still considered a social failure. Gold is a tradition so en­trenched that it has become the bedrock of southern economic be­haviour. Here, gold is not a luxury. It is an obligation. A grammar of duty and prestige, bound by caste, community and kinship.

Why do people continue to buy gold when prices are high enough to make international headlines? The answer is disarm­ingly simple: Because it affirms a kind of order. Gold does not depreciate. It does not vanish overnight like shares, nor slip into scandal like real estate. Even if it does not yield returns, it stays. This has become a sort of secular theology in the south. A belief not just in gold’s price but in its presence—its weight and glow; its ability to outlast banks, husbands and governments.

Studies suggest that Indian households, collectively, now hold over 25,000 tonnes of gold, most of it as jewellery. That figure is greater than the official reserves of the US, Germany, Italy, France and Russia combined. South India accounts for at least 40 per cent of this stock. In Tamil Nadu alone, estimates suggest per capita gold ownership to be 28 per cent higher than the national average.

The owners, disproportionately, are women. A 2024 report found that Indian women own more gold than the central banks of the top five gold-holding nations—over 11 per cent of the world’s entire gold supply. In many households, these are not just adornments. They are balance sheets.

Gold is also heavily borrowed against. Muthoot Finance, a Kerala-headquartered non-banking financial company, now disburses over ₹60,000 crore in loans annually, most of it against pledged gold. Manappuram, its competitor, claims over ₹35,000 crore in gold-backed lending. The organised gold loan market in India reached a valuation of ₹7.1 lakh crore in FY24, with projec­tions estimating it to grow to around ₹14.19 lakh crore by FY29. These are not only distress loans. They are working capital flows. Families pledge gold to pay school fees, fund businesses, settle hos­pital bills—and redeem it quietly when liquidity returns.

Gold, in other words, func­tions as India’s informal reserve currency. And in the south, it does so with a fluency that no financial innovation has yet matched. At the heart of this ecosystem are the titans of South Indian jewellery— multi-crore enterprises that began as humble family shops and now straddle continents.

Kalyan Jewellers, headquar­tered in Thrissur, Kerala, is perhaps the best-known name. Founded in 1993 by TS Kalyanaraman, the firm now has over 200 showrooms across India and the Middle East and was valued at over ₹36,000 crore on the BSE in early 2025. Kalyan’s aggressive advertising—deploying everyone from Amitabh Bachchan to Rashmika Mandanna—reflects its ambition to be both mass-market and aspirational. In FY24, it reported revenues exceeding ₹15,000 crore.

According to Ramesh Kalyanaraman, executive director of Kalyan Jewellers, “Even when prices fluctuate, footfalls may pause briefly but don’t disappear. Weddings, childbirth, and festivals remain non-negotiable occasions, and gold buying continues with budget-adjusted decisions. Emotional necessity overrides market caution.” He adds that gold saving schemes— some as low as ₹5,000 a month—have become household instruments, treated almost like EMI. “These aren’t impulse purchases,” he said. “People walk in with a number in mind— say ₹1.2 lakh for the year—and ask what that gets them today.”

AT THE BACK end, some of the demand for gold is chan­nelled through exchange offers, which allow families to refresh old jewellery without parting with the asset. “People don’t want to part with gold. They want to update it,” Kalyanaraman says. “Old gold is liquid, but also sentimental. Ex­change makes for an elegant solution.” He also notes regional vari­ance in taste. “Even 70 kilometres between showrooms can mean different preferences. We tailor inventory to the hyperlocal level.”

Demand is also getting younger. “Younger buyers are in­creasingly influencing or independently making gold buying decisions, especially in lifestyle and gifting segments,” says Kalyanaraman, citing the company’s digital brand Candere as a response to this shift. Coins and light-weight chains are now increasingly bought by working women and students. The customer, like the jewellery, has become lighter, faster, more mobile—but not less invested.

“It is, first and foremost, a cultural nuance—deeply rooted in tradition—and everything else follows from that. While gold is certainly viewed as a safe invest­ment and a hedge against economic uncertainty, in South India it is also part of everyday adornment and regular usage. The emotional and cultural significance far outweighs purely financial considerations,” says Kalyanaraman.

During the 2020-22 pandemic window, while the rest of the world oscillated between panic buying and stimulus hoarding, gold prices in India surged. Yet demand did not stall. Instead, buyers recalibrated. By 2024, India had reclaimed its position as the world’s largest con­sumer of gold jewellery, overtaking China. This is not an inciden­tal fact. It is a symptom of deeper systemic logic: that gold is the one asset class in which Indian households—particularly in the south—have unshakeable confidence. Estimates suggest Indian households hold more than 40 per cent of their non-property wealth in gold, compared to 5-6 per cent in equities. This is not because equities are distrusted but because gold behaves like a universal financial language. It can be pledged in an emergency, worn to a wedding, passed to a daughter, or hidden during political trouble. It is the only asset that operates equally in formal and informal economies.

The Reserve Bank of India’s (RBI) gold holdings have increased steadily, from 613 tonnes in 2019 to 876 tonnes by early 2025, representing over 11 per cent of its total reserve assets. In 2024 alone, it added 72.6 tonnes to its stockpile—a quiet but unmistakable gesture that, in times of systemic uncertainty, central banks too prefer things that shine. Yet, this logic is hardly confined to institutions. South Indian households already behave like decentralised central banks. They accumulate gold when surplus arises, rarely liquidate unless under duress, and monitor the price of 24-carat with the attention that others reserve for Sensex ticks or USD-INR movements.

Where this behaviour be­comes economically catalytic is in lending. Unlike idle cash, gold in India is not dormant. It is used to borrow, float, and restart. Gold loans, offered by banks, NBFCs, and even jewellers themselves, are the single largest form of col­lateralised borrowing among lower-middle-class families in the south. As of late 2024, gold loan disbursements were rising at over 40 per cent year-on-year, compared to 12–14 per cent for overall credit growth. The gold-backed lending sector is worth over ₹7 trillion. Muthoot Finance, the largest player, controls roughly ₹61,000 crore in gold assets under management. Manappuram Finance controls nearly ₹36,000 crore. Other regional NBFCs, microfinance institutions and fintech lenders add to this churn.

Gold loans are fast, require no income proof, and are largely stigma-free. More crucially, they allow borrowers to access li­quidity without severing emotional ties to jewellery. The gold remains technically intact, awaiting redemption. This psycho­logical finesse—pledge but do not part—has made gold the most emotionally elegant form of collateral. In South India, gold-backed credit is used to pay school fees, fund hospital emergencies, start shops, bridge business cy­cles, or finance weddings. It is the equivalent of a family overdraft ac­count, collateralised not by assets purchased, but inherited.

Digital gold services—via plat­forms like PhonePe, Paytm and Google Pay—have, meanwhile, allowed users to buy fractional gold (as little as ₹1) stored in vaults, redeemable in cash or coins. In fes­tive months, SafeGold reported transactions from over five million users. Unsurprisingly, South India accounted for the highest per capita purchases. What emerges is a clear trend: gold financialisation is growing but not as a re­placement for jewellery. It is layered atop it. Families now split their gold exposure—a necklace for the daughter, a 10g bar in the locker, and digital gold for liquidity. The new habits do not displace the old. They extend them.

It is no coincidence that gold’s grip is strongest in regions that once had powerful migrant economies. Kerala’s remittance his­tory, the Tamil and Telugu diaspora in the US—all have converted uncertain cash inflows into tangible gold outflows. Gold, unlike rupees or dollars, did not lose value in translation. Even today, when an NRI remits money for a wedding or festival, families often convert a portion into jewellery, coins or bullion.

IF ANY SINGLE demographic commands this economy, it is women. In South India, the woman’s locker is the real family treasury. Even in households with no bank accounts, there is usually a small collection of gold—a bangle from a wed­ding, a chain, a coin for luck. And much of it is worn close to the skin—and just as closely tied to identity. These are not idle assets. In emergencies, they become pledged capital. Families default on loans. They seldom default on gold repayments. When the pan­demic hit, the one category of lending that surged was gold loans. Not credit cards. Not personal finance apps. Not digital wallets.

To call gold irrational is to misunderstand its logic. It is not an escape from modernity. It is a parallel contract with time. Even those who understand portfolio diversification—who own mutual funds, systematic investment plans (SIPs), equity—will often keep a portion of wealth in gold. Not as a bet but as ballast. This is more evident in small towns than in metros. “The growth, appetite, and consumption patterns in Tier 1 and Tier 2 locations are undoubt­edly stronger than more mature markets,” says Kalyanaraman.

“In the south, weddings start with the financial year, with April and May seeing a lot of good muhurat days. While there is a gen­eral consensus that gold is preferred to diamonds in South India, there are communities in the south which give preference to traditional close setting diamond jewellery or stylish and modern diamond sets. In the north, there is a more cul­turally rooted inclination to using gemstones and diamonds, along with gold. The season there starts from Ganesh Chaturthi—wed­dings follow festivals, and in each of these regions, the sub-culture plays a role,” he adds.

The demand for gold is unlikely to shrink. It may shift in form— from heavy bridal sets to lighter daily wear, from 22-carat necklaces to 24-carat coins. But it will not dis­sipate. Even younger buyers, more digitally fluent, are not walking away. They are updating the habit. Some are buying gold SIPs on apps. Others are pledging digital holdings for micro loans. A few are even buying gold bonds for their parents. But all still speak of gold with respect.

Gold remains the most paradoxical of assets. Unproductive, yet profoundly useful. Prone to smuggling, yet immune to de­preciation. Mocked by economists, yet worshipped by savers. It is not a trend, it is a structure. And it will take more than re­cord prices to shake it. As long as there are daughters to marry, temples to build, debts to repay, and gods to honour, there will be gold in South India.

Recently, the Arulmigu Mariamman Temple in Samaya­puram—one of Tamil Nadu’s most visited shrines—did some­thing quietly radical. It parted with 424kg of unused gold of­ferings. Not to the poor. Not to the deity in a new crown. But to the State Bank of India, which melted it down into 24-carat bars under the Gold Monetisation Scheme. One by one, 21 temples followed. In total, over a thousand kilograms of temple gold— donated by pilgrims in anguish, in gratitude, in generations of promise and petition—was transformed into financial instru­ments. It now earns ₹17.81 crore a year in interest, earmarked for temple upkeep. Faith, returned with compound yield.

Gold in Indian temples has always been surplus by design. Of­ferings are made with no expectation of return except grace. The hundis swell with lockets, bangles, rings and miniature thrones. Much of it, historically, stayed sealed in steel trunks in sanctum closets, part of an unmoving hoard. What Tamil Nadu’s HR&CE department has now done—melting this dormant sanctity and reinvesting it—is a reframing. The gesture is radical because it does not treat gold as hoard or halo. It treats it as liquidity.

family investmentgoldinvestmentjewellerymarriageSouth India