Jefferies, the investment bank, has said rising gold prices could provide a significant, largely overlooked boost to India's economy through household wealth effects.
Indian households hold an estimated $4 trillion in gold, roughly four times the value held in equities, according to Jefferies.
The bank estimates a 10% rise in gold prices alone could add around 80 basis points to GDP and spending support, partly offset by a higher current account deficit.
Gold-backed loans have grown 73% in dollar terms over the past two years, reaching approximately $197 billion, and now account for about 7% of total bank and non-bank lending.
The bank estimates only around 15% of household gold holdings are currently monetised through formal and informal lending channels, suggesting scope for further monetisation.
Jefferies said gold ownership was especially significant for rural and lower-income households, offering a potential buffer against weak monsoon rains.
Rising gold imports, which reached $79 billion in the 2026 financial year, remain a drag on India's current account balance.
Jefferies added Manappuram Finance, Hindustan Zinc, Navin Fluorine and Meesho to its model portfolio, while removing Ambuja Cements, Jindal Stainless and Bajaj Finance.
The bank said Manappuram was its preferred way to gain exposure to accelerating gold loan growth.
