Digital gold purchases surge 83% to Rs 2,590 crore in September

Kolkata: Purchase of digital gold rose 83% from a year earlier to Rs 2,590 crore in September, as investors turned to small-ticket investments in the yellow metal despite elevated prices.

According to the World Gold Council (WGC), September purchases rose 4% from August while volumes touched 1.7 tonnes, 18% above the long-term monthly average. In January-September, digital gold purchases climbed 76% to 16.3 tonnes from 9.2 tonnes in the corresponding period last year, reflecting growing appetite for accessible gold investments.

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Digital gold allows consumers to buy the metal online in small amounts through apps and digital platforms, with the purchased quantity recorded against their account. Depending on the provider, the gold is backed by physical metal held in secure vaults and can be sold online or redeemed as coins and bars.

The low entry barrier and convenience of app-based purchases made it an increasingly popular alternative to buying physical jewellery or coins.

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The growth, however, comes with regulatory concerns. The Securities and Exchange Board of India cautioned investors in November last year that digital gold products offered by online platforms do not fall under its regulatory framework for securities and commodity derivatives and therefore do not carry investor protections associated with regulated products. The industry is consequently working towards a self-regulatory framework to establish standards for custody, transparency, disclosures and consumer protection.

"The World Gold Council's new report values the global digital gold market at $45-55 billion, less than 1% of the roughly $13 trillion physical investment gold market. Its base case projects around 27% compound annual growth to $160-170 billion by 2031, with latent demand potentially reaching $700 billion if barriers around trust, access, utility and pricing are addressed," said Samit Guha, managing director of MMTC-PAMP, a gold-refining company that offers digital gold.

The company expects digital gold volumes during the Dhanteras-Diwali season to grow by more than 50% from last year. "We see the same pattern among our customers: small-ticket, UPI-led purchases and a growing share of younger, first-time buyers, with volumes up 70% from Q2 FY26 to Q2 FY27," Guha said.

MMTC-PAMP is running festive campaigns with systematic investment plans starting at Rs 10.

Renisha Chainani, chief research officer at Augmont, which also offers digital gold, said digital gold was fast becoming an entry point into the yellow metal for Indian consumers.

WGC data showed that 52% of digital gold holders had never owned gold before, underlining the product's potential to widen participation.

"Small, app-based purchases let investors buy a little at a time instead of waiting for a dip. The next phase of growth depends on trust: clear custody, audited vaults and proper regulatory oversight," she said.