Indians Are Moving Their Gold From Lockers to Apps - Is This the Future of Investing?

Gold prices are soaring, but India’s traditional love for jewellery is taking a new turn. Increasingly, investors are choosing gold exchange-traded funds (ETFs) and digital gold over physical ornaments, shifting from jewellery lockers to demat accounts.

In August, domestic gold prices surged 12% to ₹1,58,854 per 10 grams, tracking a 13% rise in the global benchmark to $4,386 an ounce. However, the rally did not trigger a corresponding rush for physical gold, as investors increasingly turned to financial instruments.

Gold ETFs attracted ₹2,596.70 crore in net inflows in August, up from ₹1,559 crore in July, marking their third consecutive month of positive inflows. Total assets under management reached approximately ₹1.91 lakh crore, backed by 121.3 tonnes of gold. Inflows into Indian gold ETFs stood at $4.22 billion for 2026 so far.

Digital gold purchases averaged around ₹2,500 crore monthly between June and August, with August buying rising 110% year-on-year. Average daily gold futures turnover on the Multi Commodity Exchange (MCX) also increased 38% month-on-month to around ₹29,500 crore.

In contrast, India’s gold imports fell to $2.3 billion in August, down 45% from July and 58% from a year earlier, reflecting the impact of elevated prices and softer physical demand.

Gold ETFs allow investors to track gold prices without worrying about jewellery-making charges, storage or purity concerns. However, risks remain. Only 4,000 new gold ETF folios were opened in August, compared with a monthly average of around 3.3 lakh between January and July, suggesting that existing investors are adding holdings while new participation has slowed.

Prices also remain volatile. Domestic gold fell 4.6% by September 11, following August’s rally. Since gold generates no interest or dividends, returns depend entirely on price movements.

Investors should avoid chasing sharp rallies, stagger purchases and understand the risks. Gold ETFs and gold mutual funds fall under SEBI’s regulatory framework, unlike app-based digital gold.