National News
Gudi Padwa jewellery sales flat; demand for gold coins surges
Gold prices have surged to nearly Rs 90,000 per 10 grams (excluding GST) in the physical market, leading to a noticeable decline in jewellery sales in Maharashtra/Goa during Gudi Padwa, a festival traditionally associated with gold purchases. Despite this, demand for gold coins as an investment remains strong, as consumers anticipate further price appreciation. Mumbai’s largest gold hub has observed a shift in consumer behavior toward gold coins and bars. Traders said that buyers are purchasing gold coins with the expectation of future price increases.
As of Gudi Padwa, gold prices have reached nearly Rs 90,000 per 10 grams, making gold jewellery significantly more expensive. Higher prices have deterred traditional jewellery buyers, shifting demand towards investment-oriented purchases, such as gold coins. Industry experts anticipate that gold prices may continue to rise, reinforcing gold’s status as a long-term store of value.
Equal demand was observed between gold jewellery and investment-grade coins. Retailers introduced discounts and exchange offers, but high prices still impacted sales volume.Tier-2 cities experienced similar trends, with more gold coin buyers than jewellery shoppers. Lightweight jewellery, silver accessories, and gold-plated ornaments saw higher traction compared to heavy gold jewellery.
Global trade tensions and potential U.S. Fed rate cuts are boosting gold’s attractiveness as an investment. Investors are shifting towards gold due to its historical role as a hedge against inflation and economic instability The Indian Rupee’s performance against the U.S. Dollar is also a contributing factor to local gold price fluctuations.
National News
Rapid Growth In Gold Loan Merits Continued Vigilance: RBI FSR
The Report Cautioned That A Prolonged Correction In Gold Prices Could Weaken Collateral Protection
The rapid growth in lending against gold collateral amid elevated gold price volatility merits continued vigilance, even as asset impairment risks remain contained and LTV (loan-to-value) ratios provide comfortable cushion, according to the RBI’s Financial Stability Report (FSR).
Since March 2024, gold loans have grown at a staggering 42.4% annually (CAGR). To put that into perspective, other non-housing retail loans only grew at about half that speed (23%). Overall, the gold loan portfolio of lenders rose 54.5 per cent year-on-year (y-o-y) as of March-end 2026.
Both regular banks and NBFCs (Non-Banking Financial Companies) have been aggressively handing out these loans because gold prices have been so high. When gold is worth more, your gold jewelry can suddenly fetch you a much bigger loan.
FSR assessed that the recent increase in gold loans is driven primarily by existing borrowers, who are using higher gold prices to secure larger loans and roll over existing debt, as indicated by the gap between fresh originations and loan outstanding.
The report cautioned that a prolonged correction in gold prices could weaken collateral protection, increase borrower stress and result in higher delinquencies. Gold loans include agriculture gold loans that are offered against the collateral security of gold jewellery, ornaments and coins.
Right now, the situation is stable, and banks aren’t losing money yet. But the RBI is reminding lenders not to get blinded by the current gold rush. If gold prices take a tumble, a lot of these seemingly “safe” loans could turn into a major headache for the financial system.
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