Gold Jewellery as a Household Saving and Financial Security Instrument in India

Abstract

Gold jewellery has a unique niche in the socio-economic structure of India; it does not simply exist as an ornament, but as a traditional Indian household savings tool and financial security. The study looks at the economic, cultural and behavioural factors that perpetuate the need to use gold jewellery by Indian families. Using a descriptive research design and basing solely on secondary data, the study will conduct a systematic literature review and qualitative thematic analysis to examine trends in gold ownership, liquidity benefits, inflation-hedging capability, and their impact on risk diversification. The results show that gold jewellery is a form of unofficial insurance, especially in rural and semi-urban regions where formal financial services may not be available to people. It offers a liquidity boost by pledging and resale in the short term, maintains the purchasing power in inflationary times, and enhances the household resilience in economic shocks. Another aspect that the study brings to light in the gendered aspect of owning gold is the notion of Stree Dhan, which ensured the financial safety and independence of women. Although physical gold jewellery has been outcompeted by new modern products like the Gold ETFs and Sovereign Gold Bonds, cultural trust, emotional attachment and intergenerational wealth transfer practices still favour using physical gold jewellery. The study concludes that gold jewellery is still entrenched in the savings system of India and balancing cultural persistence with economic sobriety, and it still holds a crucial place in the household financial planning and long-run economic stability.