Written by Rohaan Thyagaraaju,
Chief Operations Officer,
Lex Lumen Research Journal
January 2026
Introduction
In India, Gold’s prices are checked more frequently than exam results or election outcomes, as its presence in an Indian society is not subtle. Whether at weddings or during festival rituals, Indian families closely follow gold’s price movements and often feel ache in their hearts as it surges seamlessly. We all have someone in our circle who says almost regretfully, “We should have bought gold last month when the prices were low .” Consequently, only a minimal population has retained a historical perspective on gold and understands its overall value numerically, because each individual has determined what gold meant to them during their lifetime. In other words, if gold has been presented to you during a wedding ceremony, your recollections of how you were treated will have a direct bearing on what you will remember about that gold.
The general public believed that once gold reached the ₹5,000 all-time high level on the Indian market in the middle of 2023, that level would not be surpassed again. As a result, when buying gold, most people purchased very conservatively. However, today this scenario is antithetical to their own views, as prices have soared to Rs. 16,000 per gram towards the end of January. The perception of yesterday’s selling prices and today’s is entirely different, even though the same people are still following the market. Strangely, no one really remembers the price of gold when they bought it, but everyone does remember that it was “an excellent price back then”.
An ultimate symbol of enduring security
Gold occupies a unique position in the Indian psyche and is experienced repeatedly. It is not just an asset that appreciates, but an account of everything that has happened in the past. Every major event in an individual’s life, a wedding, a crisis, and a celebration, is embedded in gold. Gold is a tangible representation of security and represents a first for many families. In India, gold is much more than just a store of wealth; it contains all of the knowledge gained over a lifetime, piece by piece. What makes Gold unique in India is that it is seen as the safest financial product available to Indians.
The market fluctuates almost every day (the stock market), at any moment (mutual funds), or has the potential to go bankrupt (banks). Gold provides a backdrop for these situations and offers comfort; when you need to convert it into some form of money, whether through a loan or an outright sale, you can do so without question or delay by drawing on your family’s collective memory. Most importantly, unlike other financial products, you do not need to require an OTP or a password. If you purchased Gold at a specific price and it appreciates to fair market value, you will have the satisfaction of knowing you made the right choice, even if the amount you made from that purchase changes.
The collective memory that results from this combined experience is what helps create the “nostalgic value” of the price paid for that Gold. When we reflect on what could have happened if we had purchased Gold at a specific price, we see that the disappointment over lost profit is not solely about lost income but primarily about a loss of security. Gold has become increasingly less of an object of conspicuous consumption and more of an object of foresight in hindsight. Seeing the rising price of gold as a moral validation of the beliefs that people have been passing down throughout generations.
Gold and the state’s uneasy relationship
Given this deeply personal rationale, the modern state has tremendous difficulty dealing with this reasoning from Indian citizens. Therefore, since Independence, the Indian government’s view of gold has changed. Instead of seeing gold as a means of protection, the Indian government sees it as a source of problems: a foreign-exchange drain, an increased trade deficit, and the protection of unaccounted wealth. Therefore, with the enactment of the Gold Control Act of 1968, India made its most aggressive attempt to end the relationship between Indians and gold. The Gold Control Act of 1968 forbade the ownership of gold, limited its purity, and sought to legislate desire.
The result of the Gold Control Act of 1968 was predictable: gold smuggling became widespread, and the public lost faith in gold. In addition, the relationship between the law and gold deteriorated, and gold ceased to be seen as a legal product. Eventually, the Gold Control Act of 1968 was repealed many years ago; however, the anxiety of the State remains. Citizens of India are still subjected to high import duties on gold, compulsory hallmarking of gold, reporting of PAN numbers, and periodic raids on jewellers, which illustrate a continued belief that gold should be discouraged. Citizens of India are encouraged to acquire Sovereign Gold Bonds, Digital Gold, and Paper alternatives that are clean, traceable, and in line with policy objectives. However, what the law cannot replace is the power of memory. You cannot wear a band on your body at the time of your daughter’s wedding. You cannot go into a neighbourhood lender and quietly pledge a digital certificate at the time of a medical emergency.
Why gold matters more than paper alternatives
No matter how well-intentioned, Government Schemes do not remove the underlying value of gold: purchased at a per-gram price, it remains an enduring investment. While the Regulatory Environment may be established through logic, distrust of the alternative investment options arises from experience. As the ever-increasing price of gold continues to rise, this has created a paradox for the State’s official “story”. It is increasingly accepted that upon reaching a new all-time high, gold has become and will always be viewed as the best long-term store of value in India, not through legislation or other policy-based strategies. Rather than simply viewing Gold as a fashion statement, it is seen as a confirmation of what families have known throughout history.
Gold as Gendered Capital in Indian Society
If we shift our focus to the significance of gold in India, it cannot be understood solely by its physical value; rather, it must be considered in the context of its gendered importance over the past several generations. For example, gold has historically served as one of the few socially sanctioned assets through which women have been able to assert direct influence and benefit.
In a cultural and legal context where men hold the majority of land titles, businesses and financial assets, gold, often obtained through dowries, gifts and inheritance, provides women with a means to build their own economic independence. Unlike other forms of assets, gold has unique characteristics. It is highly portable and can easily be divided among relatives. Gold is also widely regarded by society as inherently belonging to the woman, even when embedded in a patriarchal marriage structure.
The portability and division of gold are essential components of its gendered nature. During times of crisis (medical emergencies, domestic instability, or economic hardship), many women use gold as a silent form of insurance to access informal lending markets without needing to go through the formal banking system, which may require documentation, guarantors, or male consent.
Additionally, the way in which inheritance practices reinforce and shape the gendered nature of gold’s significance to women. Statutory divorce laws guarantee married women the same inheritance rights as men; however, in practice, married women often receive gold rather than land or other forms of immovable property. Although this change in property type may seem purely cultural, it actually represents both structural/legal exclusion and pragmatic adjustments made by women to create liquidity where previously immovable assets existed.
Conclusion
The obsession with Gold in India is thus not irrational; it is a result of living through a series of hyperinflationary events and many instances of political instability, where it has typically been found that all other forms of government have failed to provide sufficient confidence in their ability to sustain value. The belief that Gold will continue to rise year after year, as it has done from the time of purchase through to the time of sale, until the State can create a similar level of confidence in its system or systems, will lead many Individuals in the Indian Economy to treat Gold as an archive of historical experience rather than simply as an indestructible commodity.
