A 10% gold rally could create $400 billion in wealth for Indians. Jefferies names stocks set to benefit

A further 10% rally in gold could add nearly $400 billion to Indian household wealth and unlock another $20-25 billion in gold-backed loans, creating a powerful consumption trigger and opening investment opportunities across financiers, jewellers and commodity-market plays, according to Jefferies.

The brokerage has added Manappuram Finance to its India model portfolio as its preferred bet on the accelerating monetisation of household gold. It also sees Titan, Kalyan Jewellers, MCX, IIFL Finance and Muthoot Finance among the potential beneficiaries of a continued rise in bullion prices.

The scale of the opportunity rests on an extraordinary pool of private wealth. Indian households held an estimated 25,000 tonnes of gold worth $3.9 trillion as of March 2026, four times the value of their stock holdings and nearly twice the money kept in bank deposits.


Gold now represents about 25% of total Indian household wealth. Its value has increased by $1.9 trillion in just two years, dwarfing the $111 billion of gold held by the Reserve Bank of India.

Jefferies calls this India’s “hidden stimulus,” arguing that the economic impact of the gold rally remains underappreciated.

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Manappuram emerges as Jefferies’ preferred gold loan play

Jefferies assigned Manappuram Finance a 3% weight in its model portfolio, funding the addition through modest reductions across selected lenders, including Bajaj Finance.

Manappuram derived 82% of its FY26 revenue from gold-related lending, according to the report. That compares with 90% for Muthoot Finance and 50% for IIFL Finance.

The brokerage expects formal lenders to benefit as Indian households increasingly use gold as collateral instead of leaving it as a dormant asset.

Organised gold loan assets under management reached an estimated $197 billion in March 2026, rising 73% over two years. Gold loans now account for around 7% of total lending by banks and non-banking financial companies.

The expansion is already large enough to influence the broader economy. The increase in gold loan assets during FY26 was equivalent to approximately 130 basis points of GDP, Jefferies estimated.

Yet the monetisation opportunity remains far from exhausted. Gold loans amounted to only 5.1% of the value of household gold in March 2026. Assuming a loan-to-value ratio of around 65% and including borrowing from unorganised lenders, Jefferies estimates that only about 15% of household gold is currently monetised.

The ratio of gold loans to household gold value has declined by about 80 basis points from March 2024 because the increase in lending has failed to match the sharp appreciation in bullion prices.

A normalisation over the next two years could generate an additional $15-20 billion of gold loans annually. Combined with the impact of another 10% increase in gold prices, this could provide an estimated 80-100 basis points of support to spending and GDP.

Titan, Kalyan and MCX among other beneficiaries

Jefferies identified jewellery companies Titan and Kalyan Jewellers as potential beneficiaries of a further gold-price surge.

Gold, silver and jewellery contributed 100% of Kalyan’s FY26 revenue and 91% of Titan’s standalone revenue, according to the report.

India’s gems and jewellery market, about 80% of which is linked to gold jewellery, has expanded rapidly during the bullion upcycle. Annual sales are estimated to have reached $118 billion in FY26, nearly doubling from $61 billion in FY23 and representing a compound annual growth rate of 25%.

MCX also offers material exposure to the theme through commodity trading. Gold-related activity accounted for 41% of its FY26 revenue, while Hindustan Zinc derived 24% of its revenue from gold and silver.

Jefferies added Hindustan Zinc to its model portfolio with a 2% weight, replacing Jindal Stainless, to gain exposure to the silver theme.

The brokerage also added Meesho with a 2% allocation as a play on mass discretionary consumption. A stronger gold wealth effect could be particularly relevant for consumption among rural and lower-income households, where bullion ownership is more widespread than equity ownership.

Navin Fluorine was the fourth addition to the model portfolio, with a 2% weight, replacing Ambuja Cements. Jefferies’ rationale for the stock was based on growth opportunities across contract development and manufacturing, cooling products, specialty chemicals and advanced materials rather than direct exposure to gold.

Why gold may have a bigger wealth effect than stocks

Despite strong domestic investment flows into equities over the past decade, gold remains a substantially larger component of Indian household balance sheets.

Investors put $96 billion into equities, including mutual and pension funds, during FY26. In the same year, India spent $79 billion on gold imports.

Gold ownership is also much more widely distributed than stock ownership. Jefferies said this could allow rising bullion prices to support consumption at the bottom of the income pyramid and provide a buffer during deficient monsoons.

Gold prices have remained above $4,000 an ounce for about a year and have increased 2.5 times over the past three years. Jefferies expects prices to rise further, supported by fiscal concerns in the US and Japan and the constraints these place on monetary policy.

Participation in gold is also widening beyond jewellery and physical bullion. Assets under management of Indian gold exchange-traded funds increased from $2.8 billion in March 2023 to $18.1 billion in July 2026.

The import bill risk

The wealth effect comes with a significant macroeconomic trade-off. India imports most of its gold, meaning higher prices and stronger demand can place additional pressure on the current account.

Gold imports, including jewellery, increased from $36 billion in FY23 to $79 billion in FY26, a compound annual growth rate of 30%. The FY26 bill was equivalent to around 2% of GDP, while gold accounted for approximately 10% of the country’s total imports.

The net impact is therefore a balance between stronger household wealth, higher credit availability and consumption on one side, and a larger import bill on the other.

For the stock market, Jefferies’ thesis positions gold financiers as the most direct play on the monetisation trend, while jewellers, MCX and mass-consumption companies could benefit from the wider wealth effect. The longer gold remains elevated, the more India’s vast stock of household bullion begins to operate not merely as savings, but as an engine of credit and spending.