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The Collection Wed, 09 Apr 25 |
Multiple stories, multiple perspectives, one theme worth your time—every week. |
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On 2 April, US President Donald Trump announced sweeping tariffs on almost all trading partners of the United States. A 10% general import tariff, and then some more for a long list of specific countries. On imports from China, this adds up to 54% (though it might be over 100% by the time this newsletter is published); for India, 26%. The Trump tariff list is so bafflingly exhaustive, it even covers islands inhabited almost solely by penguins.
To say this has set a particularly hangry cat among the pigeons would be an understatement. This past week, global stock markets have reflected the chaos as investors and analysts frantically try to figure out a new global trade order. Following Trump’s announcement, key stock markets crashed (including in India), though Tuesday saw a partial—and hesitant—recovery.
One piece of common (though by no means infallible) investing wisdom for volatile times is dialling up allocations in gold. This spell seems no different. Despite a dip immediately after the announcement, gold prices started rising on Tuesday on “safe haven demand” and analysts were already putting out familiar statements about the asset’s virtues.
Indian households, of course, need little encouragement to follow that particular maxim. Current estimates put the amount of gold Indian families have stashed away at over 25,000 tonnes. No doubt, many of them now contemplate adding to that stash.
Whether gold prices toe the predictions of analysts is a topic for later, but over the past few months and quarters, The Ken has dissected India’s gold landscape from multiple vantage points. Perhaps this week’s edition of The Collection—which turns the spotlight on some of these pieces—will help you approach decisions about gold from a more informed position.
In recent years, India’s gold obsession has transcended the physical realm. Gold exchange-traded funds (ETFs), digital gold accounts, the now discontinued sovereign gold bonds… Indians continue to buy physical gold with enthusiasm, but quite a number have also adopted alternate channels for investing in gold. A trend that was apparent as early as 2022.
Indians and gold—old affair, new equations
Indian households may have stocked up to 25,000 tonnes of gold, but most of that is physical gold, used in jewellery. The tides are set to change, though, with new products like gold-backed ETFs, sovereign gold bonds, and digital gold in the market
Fast forward three years and annual Gold ETF inflows have hit Rs 10,000 crore, and the World Gold Council estimates around 40 million customers hold some form of “digital gold”.
But whatever its conveniences, the truth is that digital gold as it stands has platforms operating under little to no oversight. And looming new regulations may upset the apple cart. Aggressive and sometimes misleading advertisements are by no means uncommon either, with some gold-leasing platforms—which allow you to lease out your digital gold assets—“assuring” returns as high as 15–21%.
These stories below, from January and February 2025 respectively, explore the risks associated with digital gold apps and other related investments, and what impending regulations mean for gold-leasing platforms such as Jar, Gullak, and Safegold.
Jar and its digital-gold peers are sparkling. Until regulators come knocking
Tighter norms in the unregulated digital-gold space could throw a wrench into micro-gold platforms riding high on the yellow metal’s popularity
Gold-leasing apps ‘assure’ up to 21% returns. It’s a P2P play escaping RBI’s crackdown
Gullak, Safegold, Plusgold, and others promise easy money, but in an unregulated market with no safety net for investors, even industry insiders are sounding the alarm
Of course, the overwhelming majority of Indian gold sales remains in the form of jewellery. And for large players in the retail jewellery segment, the past few years have been a time of change.
Titan and its jewellery unit Tanishq, once the biggest mover in the organised jewellery space, has seen its premiums come under attack. From as high as 10–12% in the early 2010s, these premiums had been whittled down to 5–6% by mid-2024. One of the reasons, not surprisingly, is the arrival on the big stage of competitors such as Kalyan Jewellers and Senco Gold—with some of Tanishq’s own playbook being hijacked by rivals.
Tanishq wrote the gold-retail playbook. Kalyan Jewellers hijacked it
For over two decades, the jewellery retailer has dominated organised retail in the sector. Now, regional players like Kalyan Jewellers and Senco Gold are challenging its lead
Prospects are sunnier for another Titan brand, Zoya, however, which seems to have hit paydirt by aggressively selling “the notion of exclusivity and craftsmanship to affluent women above the age of 40”. As my colleague Debanjali writes in the story below about its 15-year journey to profitability, it did need a bit of patience.
This Titan jewellery brand found its perfect match in the crazy rich 40+ Indian woman
Zoya, the ultra-luxury jewellery brand, with 15 years of costly patience behind it, is finally profitable and aiming for Rs 400 crore in FY25—proving exclusivity, not scale, drives its luxury appeal
But whether ultra-luxury treat for the rich or last-ditch emergency fund for everyone else, the first virtue of gold touted by investment advisors is its capacity to serve as a resilient store of wealth. Ready to be liquidated when needs arise—whether through sale, or more commonly, as collateral for a gold loan.
And as of December, gold loans had emerged as the fastest growing segment in the personal lending market, rising 71% year-on-year.
In order to serve this upswell in demand, though, bank and non-bank gold-loan teams are flouting almost every rule in the book. As my colleague Rounak Kumar Gunjan writes quoting two industry executives, one in 10 gold loans currently is sanctioned through malpractices such as misreporting the purity of gold or tweaking the weight. And this is a practice popping up across cities, from tier-1 cities like Noida and Mumbai, to tier-2 and -3 locations such as Karnal and Bulandshahr.
Rounak follows three borrowers on their quest to seek gold loans in this investigation from August 2024. It is worth a read, especially because of the look it gives into why and how such misselling happens.
‘Need a gold loan? Come through the back door’
Lenders are flouting every rule in their books to cater to the rising gold-loan demand. The Ken tracked down such cases deep in the country's hinterlands from Karnal to Bulandshahr
Please find this week’s full collection on gold below. As always, you can write to [email protected] with any thoughts or suggestions you’d like to share.
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Rahul leads the promotion and distribution efforts for the journalism produced by The Ken. He works at the intersection of the publication's editorial and business operations.
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