As India enters its peak festive and wedding season—traditionally the biggest period for gold consumption—consumer buying habits are shifting.

While high and volatile gold prices are limiting casual purchases, demand for gold as an investment asset remains strong. Notably, tech-driven “digital gold” has seen massive growth, despite severe warnings from financial regulators.

Shift from Physical to Digital Gold

Traditional Behavior: Indian households traditionally buy physical gold (jewellery and coins) during festivals and weddings as an auspicious asset.

Emerging Trend: Investors are increasingly adopting digital gold due to convenience and lower entry barriers.

Growth Data: Digital gold purchases reached approximately ₹2,500 crore (~1.6 tonnes) per month between June and August 2026. This represents a 110% Year-on-Year (YoY) increase compared to August 2025.

Price Sensitivity & Macro Drivers

Gold prices have experienced volatility, driven by global macroeconomic factors such as rising crude oil prices, inflation fears, and policy signals from the US Federal Reserve.

High prices are curbing discretionary retail shopping, making systematic digital investments more attractive to price-sensitive buyers.

The Business & Regulatory Challenge

The Regulatory Gap: Unlike Gold ETFs or Sovereign Gold Bonds, digital gold is currently unregulated.

SEBI’s Warning: In November 2025, the Securities and Exchange Board of India (SEBI) cautioned investors that digital gold products:

• Are not classified as securities or regulated commodity derivatives.
• Operate entirely outside SEBI’s oversight.

Counterparty & Operational Risk: Because the estimated ₹7,500 crore accumulated over June–August 2026 sits in a regulatory grey area, investors face significant exposure:

If a fintech platform or issuer defaults, investors have no access to official SEBI grievance mechanisms or statutory protection.

Looking Ahead: Future Regulatory Framework

To mitigate these systemic risks, the Indian government is reportedly exploring a joint regulatory framework involving the Reserve Bank of India (RBI) and SEBI. Under proposed rules:

• ​Digital gold providers would fall under formal oversight.
• ​Every digital unit sold would legally require 100% physical bullion backing in audited vaults.