ET Deep Dive: Melting The Vault

Welcome to ET Deep Dive, ET's best reported stories on audio. Today's episode is based on a report by Liji Philip and Shantanu Nandan Sharma on how India's younger generation is changing its relationship with one of the country's most emotionally loaded assets. gold. It's Sunday the 12th of July. I'm Anirban Chaudhary. This is the Morning Brief. Let's start with a story. A young couple in Mumbai, we will call them Ritu and Madan, They inherited a stash of gold jewellery Heavy bangles, an elaborate bridal necklace A few ornate heirloom pieces But instead of keeping the jewellery in the locker They sold it, all of it For close to 20 lakh rupees They used that money to boost the down payment of their first home in Navi Mumbai The result? Their monthly EMI dropped by about 20,000 rupees Money that's now funding weekend trips to Lonavala Instead of sitting untouched in a vault It's a small story, but it captures something much bigger happening across the country As Keyur Shah, CEO of Mutut Exim puts it simply Younger generations are driven by milestones For them, old jewellery is no longer an emotional burden they feel compelled to hold on for life So, across India, a growing number of Gen Z and millennial customers are unlocking the value of idle gold and rewriting India's age-old relationship with it Many are selling inherited jewellery to finance milestones buy a home, pursue higher education, launch a business or reinvest the proceeds in wealth-creating financial assets. Others are walking into premium jewellery stores and exchanging traditional ornaments for contemporary designs that better reflect their taste, lifestyle and aspirations. Gold is Lakshmi. When it is recycled to fund education, Lakshmi transforms into Saraswati, the goddess of knowledge and wisdom Says Rajiv Popli, director of the Popli Group, a family-owned luxury enterprise known for its jewellery business Popli says people are recycling inherited jewellery without any qualms He says, old jewellery, evaluating its purity and processing it for recycling has evolved into an entirely new logistical operation. He adds that nearly 70-75% of purchases across Popli outlets now involve gold exchanged by customers. He says India has only scratched the surface. More than 1 lakh tonnes of gold are lying idle in Indian lockers. Only a fraction of it has been recycled. India continues to be the world's largest consumer of gold jewellery. Beneath that enduring love for the yellow metal, a shift is underway. Demand for gold jewellery measured by volume plunged 21% year-on-year in FY2026. But investment demand for gold bars and coins surged by about 22% in the same period. This is according to an analysis by ICRA based on data from the Gold Council of India. This divergence points to a changing mindset, particularly among younger Indians who view gold less as an ornament and more as an investment. The change in mindset is reflected in the decision of a 25-year-old banker in Bengaluru. As domestic gold prices soared, rising 33% year-on-year in FY25 and surging 60% in FY26, the banker seized the opportunity to sell her inherited jewellery and channel the proceeds into a diversified equity portfolio. She says, gold is an asset, not something that has to stay locked away forever. If prices are at record highs and I can redeploy that money into investments with better long-term potential, I'm comfortable making that choice. Another example, Supriya Venkatesh, 29 years old, who also resides in Bengaluru, recently exchanged her mother's jewellery that was passed down to her for her wedding last year. She says, initially my mother was very hesitant, but I managed to convince her. Moreover, she says, in today's age, decades-old jewellery looks outdated. Tanishita Aroda, a 31-year-old doctor in Delhi, echoes that sentiment. She says, Jewellery passed down from our mothers and grandmothers is often too heavy and dated in design to be worn daily. If it's only going to sit in a locker as an investment, it might as well be converted into gold bars or coins. This shift actually is primarily driven by the soaring price of the yellow metal. Gold prices in India climbed past Rs 160,000 for 10 grams earlier this year before moderating in recent months. For a generation raised on financial planning and portfolio diversification, the emotional pull of heirloom jewelry is giving way to the practical logic of wealth creation. In a Bengaluru household three generations were united by this need to unlock an age asset A 24 his parents and grandparents agreed that the family ideal jewellery could serve a better purpose than remain locked away in bank They sold a portion of the gold, raising nearly 80 lakh rupees. Part of the proceeds financed the young man's master's degree in the US, while another portion became seed capital for his father's new food processing business. Our parents always told us that gold is meant for difficult times and for life's major milestones, says the 24-year-old. He says higher education and starting a business are exactly those kind of milestones. That's what the gold was meant for. The broader trend of treating gold as a financial asset is unlikely to reverse anytime soon, especially with prices remaining high. Even after the recent correction, gold price remains far above its historical average, encouraging households to sell or exchange gold jewellery and prompting large jewellery chains to expand gold recycling and exchange programs that reduce their need for fresh gold, says Ajay Srivastav, founder of Delhi-based trade think tank GTRI. The changing behaviour of young Indians is visible in jewellery shops. In the past nine months, jewellery retailer Tanishq, for example, has actively encouraged customers to exchange old ornaments for new ones, positioning the initiative as part of a broader effort to boost domestic gold recycling and curb the country's reliance on imports. Arun Narayan, CEO of the jewellery division of Titan Company, says that in the last few months, Customers have exchanged 11,000 kilos of gold According to Sanchari Basu Chaudhary A sociologist at Pune Symbiasis Law School Young Indians are increasingly opting for paper gold Through instruments such as gold ETF While those buying jewellery are gravitating towards lighter designs In 18 carat gold or lower Largely in response to soaring prices She adds that the growing participation of women in the workforce is also reshaping investment preferences. As more women earn and accumulate savings, many are opting to invest their money in residential or rental real estate rather than hold large quantities of gold which entails storage costs and security concerns, whether kept in bank lockers or at home. But if gold is increasingly viewed through the lens of financial returns, will the emotions associated with the yellow metal eventually fade away? Not quite. Sociologist Basu Chaudhary says, As gold becomes more expensive, the jewellery gifted on occasions such as weddings and festivals may acquire an even greater emotional significance. She adds that the cultural prominence of gold varies across the country, increasing as one moves from the north to the south, where gold occupies a central space. While the recent surge in gold recycling and sale will likely continue it also raises an important question Who stands to gain more from bigger transactions customer or jeweler Srivastava of GTRI says that the economics often favor the jeweler. He points out that advances in jewelry manufacturing now enable designers to create ornaments that appear larger and more intricate without using additional gold. He also notes that many customers exchange 22-carat jewelry for contemporary designs in 18 carats, which are lighter, more durable and increasingly fashionable. While both pieces may each weigh 20 grams, a 22-carat ornament contains about 18.3 grams of pure gold compared with only 15 grams in an 18-carat ornament. That, however, does not make the transaction unfair. The arrangement is entirely legitimate, he says, provided the lower purity is transparently disclosed and the new jewellery carries the appropriate hallmark. According to ICRA's estimates released in May, India's domestic jewellery industry is expected to grow by around 15% in value in the current financial year, driven largely by elevated gold prices and robust investment demand. Yet, gold jewellery consumption by volume is projected to decline once again. In other words, consumers are likely to keep monetizing idle gold, either by selling or exchanging it. But not every customer walking into a jewelry showroom is a Gen Z or a millennial, reimagining the role of inherited gold. R. Prasad, former chairman of the Central Board of Direct Taxes or CBDT, says a section of recycled gold has a mercure origin. Some of it comes from smuggled gold In such cases, the process is less about recycling old jewellery into new designs And more about converting black money into white He adds that gold smuggling typically rises when customs duties are hiked Prasad points out that recycled smuggled gold is hardly a new phenomenon Only its methods have evolved He says, in the late 1970s, we investigated a case involving gold smuggled through Nepal. They were recycled into gold bars and then used to finance the purchase of motor vehicles. At the time, the Kolkata-Jamshedpur belt had emerged as a major hub for such illicit activity. Back then, recycling was largely informal, he says. Today's organised retailers were not part of that ecosystem. So, gold hasn't changed. The generation has. And for Gen Z and millennials, the new mantra is simple. The gold in the locker does not glitter. That's it for today You were listening to the latest ET Deep Dive Reported by Liji Philip and Shankanu Nandan Sharma Additional reporting by Pratishta Bagai Narrated for audio by me Anirban Chaudhary Sound design by Indranil Bhattacharji Keep listening to our podcasts Have a good Sunday