India's Gold Rush: Households Flock to Recycle as Prices Soar
High gold prices in India have led to a surge in gold recycling activity and demand for gold-backed loans. In 2026, domestic gold prices hit intraday highs near ₹1,75,000 per 10 grams, prompting households to treat their gold holdings as active financial capital. Families are now using their idle jewelry to fund major life events such as buying homes and paying for international education.
Data shows that recycling activity has increased by approximately 60% in the first half of 2026 compared to previous cycles. Retailers are adapting to this trend by redesigning their business models, with many large jewellery houses transforming their stores into recycling hubs. This shift helps retailers secure inventory and reduce their dependence on fresh gold imports.
The financial sector has also seen a significant growth in gold-backed loans. Organized gold loan assets under management reached approximately $197 billion by March 2026, reflecting a 73% growth over two years. However, this trend brings specific risks for consumers, as many still recycle through informal channels where purity testing is not standardized.
Investors are also monitoring the impact on companies in the space, with jewellery retailers managing margins and NBFCs and banks navigating the risks associated with volatile gold prices and loan-to-value ratios. Regulatory updates on gold taxation and import policies will remain key monitorables.