Industry Odisha Bureau, Oct 27: Indians bought digital gold worth ₹2,590 crore in September, up 83% on-year. The surge came even as gold prices stayed elevated. Figures from the World Gold Council (WGC), reported by ET, show strong momentum. They also show a product growing faster than the safeguards around it.
According to WGC data, September purchases rose 4% over August. Buyers acquired 1.7 tonnes during the month. That was 18% above the long-term monthly average. Between January and September, purchase volumes rose 76% to 16.3 tonnes. The same period last year saw 9.2 tonnes.
These numbers measure different things. The 83% figure tracks rupee value, which rises with gold prices. It does not mean physical demand grew by the same margin. The tonnage figures offer a cleaner view of actual metal bought. On that basis, nine-month demand rose 76%, still a sharp gain. Neither number shows how many people are buying. Purchase data also captures flows, not holdings left after sales and redemptions.
Digital gold works through apps and online platforms. A customer pays any small amount, often through UPI. The platform credits a matching fraction of gold to the customer’s account. Depending on the provider, physical metal backs it in secure vaults. Customers can later sell online or redeem holdings as coins or bars.
Not every platform works the same way. The customer usually holds a contractual claim against the provider. Legal ownership, custody terms and vault checks depend on each platform’s arrangements. Buy-sell spreads, taxes, storage charges and delivery conditions can also differ. Such costs can narrow returns even when gold prices climb.
Convenience explains much of the appeal. The entry barrier is tiny. MMTC-PAMP runs systematic purchase plans starting at just ₹10. Buyers need not visit a jeweller or commit a large sum. They can accumulate gradually instead of waiting for a price dip. Renisha Chainani, chief research officer at Augmont, made that point to ET. She described digital gold as a fast-growing entry point to the metal.
The buyer profile is shifting too. WGC data shows 52% of digital gold holders had never owned gold before. Samit Guha, managing director of MMTC-PAMP, sees a similar trend. He told ET his customers increasingly make small, UPI-led purchases. Younger, first-time buyers make up a growing share, he said. MMTC-PAMP’s volumes rose 70% from Q2 FY26 to Q2 FY27, he added.
These patterns suggest a widening base of gold owners. They do not by themselves prove broader financial inclusion. Nor do they show whether digital gold replaces jewellery or simply adds to it. A single company’s growth may also not reflect the whole industry.
The festive season will test the momentum. Dhanteras and Diwali have long been peak gold-buying periods in India. MMTC-PAMP expects its digital gold volumes this season to grow over 50%. That is a company forecast, not realised demand.
Behind the growth sits a regulatory gap. SEBI warned investors about online digital gold products on November 8, 2025. The regulator said these products are neither notified securities nor regulated commodity derivatives. Investor protections tied to regulated securities therefore do not extend to them. SEBI also flagged possible counterparty and operational risks for buyers.
That warning has limits worth noting. It does not make digital gold illegal. Nor does it mean every platform is unsafe. It means SEBI’s disclosure rules and grievance mechanisms do not apply. Other laws, such as consumer protection rules, may still offer some recourse.
The caution had a visible effect. Business Standard reported a nearly threefold jump in withdrawals from fintech platforms afterward. Bullion body IBJA later urged SEBI to regulate digital gold firms.
Regulated alternatives do exist. SEBI pointed to gold ETFs, exchange-traded commodity derivatives and electronic gold receipts. These trade through registered intermediaries under SEBI oversight.
For now, the industry is building its own guardrails. Providers are working on a self-regulatory framework, ET reports. It aims to set standards for custody, transparency, disclosure and consumer protection. Voluntary codes can lift practices across the industry. But they lack the legal force of binding regulation. Chainani said the next phase of growth depends on trust. She named clear custody, audited vaults and proper regulatory oversight as essentials.
The global picture shows both promise and uncertainty. Guha cited a new WGC report valuing digital gold at $45–55 billion globally. That is under 1% of the roughly $13 trillion physical investment gold market. The WGC’s base case projects about 27% annual growth to 2031. That would lift the market to $160–170 billion. Latent demand could reach $700 billion, but only if key barriers ease. Those barriers include trust, access, utility and pricing. These are global and conditional estimates, not forecasts for India.
India’s digital gold boom rests on easy access and a deep cultural affinity for the metal. Its staying power will depend on something harder to build. Investors need confidence that every gram on their screen sits in a vault. Transparent pricing, verified custody and reliable redemption will decide whether growth lasts.
