The New Gold Rush: Why Investors Are Moving From Jewellery to Digital

Why It Matters

The migration to digital gold reshapes capital allocation in the precious‑metal sector, boosting liquidity and lowering barriers for younger investors while weakening the traditional jewellery market. This trend strengthens India’s role as a global gold‑ETF hub and signals a lasting structural change in how gold is held as a safe‑haven asset.

Key Takeaways

• Jewellery making charges up to 25% erode resale value.
• Digital gold offers 24K purity, no storage risk.
• Gold ETF inflows hit $5.2 billion in 2025, 283% YoY.
• Physical jewellery demand fell 24% YoY, sales value rose 30%.

Pulse Analysis

The digital‑gold wave in India is driven by a confluence of cost efficiency, convenience and generational preferences. Traditional jewellery carries making charges of 8‑25% that are lost on resale, whereas digital gold platforms let investors purchase pure 24‑karat metal in rupee‑sized increments, eliminating storage fees and theft risk. Millennials and Gen Z, accustomed to app‑based finance, gravitate toward these frictionless products, aligning their portfolios with a broader digital‑first lifestyle.

Gold ETFs have become the flagship of this transition. In 2025, net inflows jumped 283% YoY to about $5.2 billion, lifting assets under management to roughly $7.8 billion and positioning India as the third‑largest gold‑ETF market globally. The funds’ transparency, exchange‑traded liquidity and direct price tracking make them attractive amid volatile equity markets, where the Nifty 50 returned just 10.5% compared with gold’s 76.5% gain. This surge also reflects investors’ search for safe‑haven assets as the rupee weakens and global uncertainty persists.

The shift has broader implications for the Indian gold ecosystem. Physical jewellery consumption fell 24% YoY, yet the sector’s sales value rose to an estimated $90 billion, driven by soaring spot prices and a move toward lighter, lower‑purity pieces. As digital alternatives capture a larger share of total gold demand—currently about 40%—the industry may see a reallocation of capital from manufacturing and retail toward custodial services and fintech platforms. Regulators and traditional jewelers will need to adapt, potentially by integrating digital‑gold offerings or enhancing value‑added services to retain relevance in a market that increasingly favors liquidity, purity and digital access.