Connect with us

National News

Outstanding gold-backed loans  surge by  128% from a year earlier

Published

on

India’s appetite for borrowing against gold is reshaping the country’s credit landscape. Outstanding gold-backed loans have surged 128% from a year earlier, crossing Rs.4 lakh crore ($48 billion) for the first time, according to data from the Reserve Bank of India. As of Jan. 31, loans secured by gold jewellery stood at Rs.4,00,517 crore, marking one of the fastest expansions in retail credit in recent years.

The boom in gold loans has helped propel overall non-food bank credit growth to 14.4% year-on-year. Personal loans now account for 34.5% of total bank lending, outpacing other segments and underscoring a broader shift toward consumer-driven credit expansion

Gold loans alone contributed roughly 9% of incremental bank credit during the period. Between January 2024 and January 2026, outstanding gold-backed credit rose by nearly Rs.3.1 lakh crore—an increase of about 338% over two years—more than quadrupling the size of the portfolio.

Two factors are driving the surge. First, gold prices have climbed roughly 152% over the past two years, increasing the collateral value of household holdings. Second, regulatory guidance requiring banks to classify loans secured by gold explicitly as gold loans has sharpened reporting and accelerated balance-sheet growth in the segment.

The trend highlights a distinctive feature of India’s financial system: households’ vast stock of physical gold, long viewed primarily as a store of wealth, is increasingly being mobilized as collateral for formal credit.

While personal lending and credit to nonbank financial companies within the services sector continue to expand rapidly, industrial credit remains uneven. Loans to micro, small and medium enterprises are growing steadily, but borrowing by large corporations has stayed relatively muted.

Since March 21, 2025, banks have added Rs.21.8 lakh crore to their non-food loan books, translating into 12% growth for the financial year to date. Yet it is gold—rather than factories or infrastructure—that is emerging as one of the most dynamic engines of India’s current credit cycle.

Continue Reading
Advertisement JewelBuzz Banner
Click to comment
Subscribe
Notify of
guest
0 Comments
Oldest
Newest Most Voted

National News

MCX Gold, Silver Surge On Escalating Geopolitical Tensions

The Softer Dollar Provided Limited Support To Bullion, While Traders Largely Focused On The Geopolitical Backdrop and The Prospect Of Fresh Clues On U.S. Monetary Policy.

Published

on

Gold and silver prices edged higher in India on Monday as renewed geopolitical tensions in the Middle East boosted demand for safe-haven assets, even as investors remained cautious ahead of key U.S. inflation data expected later this week.

On the Multi Commodity Exchange (MCX), gold futures rose more than Rs 650 to trade above Rs 1.40 lakh per 10 grams, while silver futures gained nearly Rs 700 to move aboveRs Rs 2.18 lakh per kilogram. The advance reflected renewed risk aversion after the United States tightened pressure on Iran, rekindling concerns over the security of global energy supplies and the broader inflation outlook.

In international markets, spot gold rose about 0.4% to around $4,016 an ounce, recovering after briefly slipping below the psychologically important $4,000 level overnight. Spot silver also rebounded modestly but remained under pressure, trading near $58 an ounce.

The gains in precious metals came despite a relatively resilient U.S. dollar, which eased only marginally to around 101.2 against a basket of major currencies. The softer dollar provided limited support to bullion, while traders largely focused on the geopolitical backdrop and the prospect of fresh clues on U.S. monetary policy.

Energy markets reflected the same risk-off sentiment. U.S. West Texas Intermediate crude climbed toward $80 a barrel, while Brent crude advanced to around $85, extending gains as fears of supply disruptions returned to the forefront.

The latest catalyst came after President Donald Trump reinstated a blockade on Iranian vessels transiting the Strait of Hormuz and called on countries benefiting from U.S. naval protection to contribute toward securing the strategically vital shipping corridor. The move followed renewed hostilities between Washington and Tehran, heightening concerns that disruptions to one of the world’s busiest oil routes could fuel another wave of energy-driven inflation.

Higher oil prices have complicated the outlook for global central banks, particularly the U.S. Federal Reserve, which continues to balance inflation risks against slowing economic growth.

Investors are now turning their attention to the U.S. Consumer Price Index (CPI) data due Tuesday, which is expected to provide fresh direction for interest-rate expectations. Markets will also closely monitor Federal Reserve Chair Kevin Warsh’s testimony before Congress for signals on the central bank’s policy trajectory.

According to market pricing, traders now see roughly a 51% probability of a Federal Reserve rate hike in September, while the likelihood of rates remaining unchanged has fallen to about 23%.

For bullion markets, the interplay between geopolitical uncertainty, energy prices and monetary policy expectations is likely to remain the dominant theme. While safe-haven demand continues to underpin gold, any surprise in inflation data or a shift in the Federal Reserve’s policy outlook could determine whether the metal extends its rally or faces renewed selling pressure.

Continue Reading

Trending

JewelBuzz is Asia’s First Digital Jewellery Media & India’s No.1 B2B Jewellery Magazine, published by AM Media House. Since 2016, we’ve been the trusted source for jewellery news, market trends, trade insights, exhibitions, podcasts, and brand stories, connecting jewellers, retailers, and industry professionals worldwide.

We would like to hear from you...

GET WHATSAPP NEWS ALERTS

0
Would love your thoughts, please comment.x
()
x