In contrary to general belief, gold consumption among the middle and lower income households seems to be much higher than that of upper class of the society, revealed the Nationwide Household Gold Consumption survey.

Though the per capita gold consumption is the highest among rich, the total volume still rests with middle income group. While there is an increasing propensity to consume gold with rise in income, the share of gold in the portfolio does not increase in same proportion of income, said the survey conducted by the India Gold Policy Centre.

While the households with over ₹20 lakh of income purchased 27 grams of gold, the lower income group consumed 51.68 grams with consumers in ₹5-20 lakh income bracket buying 25.13 grams.

Interestingly, cash remained the preferred source for making payment when it comes to buying gold. The nationwide survey covered 40,000 households built on a sample frame of two lakh households, representing 308 million Indian households.

Arvind Sahay, Chairperson, India Gold Policy Centre, said contrary to common mind-set that gold is for the rich, the survey showed that middle-income households consume the most both in value and volume terms.

The study also revealed that rising income, especially in the urban areas, was the driving force of gold consumption, underlining that demand responds more to income than price.

Covid-led demand

Pandemic played a significant role in strengthening the case for yellow metal as an asset. The havoc caused by the outbreak led to a sharp increase in the stock market volatility, which triggered a ripple effect, reducing market liquidity. Gold once again surfaced as a safe haven due to the diversification benefits than equitiess, he said at the two-day conference on Gold & Gold Markets 2022 organised by India Gold Policy Centre of the Indian Institute of Management, Ahmedabad.

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