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People from middle income group purchase more gold and prefer to have the yellow metal in the physical form, a report said on Monday.
The Gold and Gold Markets 2022 report by India Gold Policy Centre (IGPC) also said that people in the higher income group are interested in having the yellow metal in digital or paper format.
Per capita consumption of gold is the highest among the rich, but the total volume still rests with the middle income group.
The majority of the consumption is concentrated among households in the annual income range of Rs 2-10 lakh, consuming an average of 56 per cent of the volume, the report said.
Hence, they prefer safe haven - gold and gold products or secured government products like bank fix deposits, public provident fund, life insurance, post office savings among others, where the risk is minimal, it added.
For a class having annual income above Rs 10 lakh, which is upper-middle and rich, savings are gains over their extra earnings, idle additional money and capital gain, it stated.
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Hence, they prefer saving in stock or shares, derivatives and real estate, it added.
The household gold consumption report was prepared through a survey conducted by IGPC in association with People Research on India's Consumer Economy (PRICE). The survey was carried out among 40,000 households.
The report further revealed that gold consumption wasn't affected by demonetisation or the implementation of GST (Goods and Services Tax).
In the last five years at least 74 per cent of the high income households confirmed buying gold, it said.
The report also found that gold symbolises celebration, and weddings and festivals contribute to 65-70 per cent of the reasons for jewellery purchase while 30-35 per cent is discretionary spend.
About 43 per cent of Indian households buy gold for weddings, 31 per cent purchase with no specific occasions, it added.
"Contrary to the common mindset that gold is for the rich, the survey showed us that middle-income households consume the most amount of gold in value as well as volume. Talking about the factors, we must acknowledge that the pandemic has played a significant role in strengthening the case for gold as an asset," IGPC chairperson Arvind Sahay said.
The COVID-19 virus showcased the fragility of the global political and financial systems and the havoc caused by the outbreak led to a sharp increase in the stock market volatility, which triggered a ripple effect, reducing market liquidity, he observed.
"Gold once again surfaced as a safe haven due to the diversification benefits it gives to equity portfolios," he added.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
