Gold Loans Hit Record High – Demand Soars Amid Rising Gold Prices
With gold prices touching new highs, the number of people taking loans against gold has surged significantly. As the value of gold rises, banks and financial institutions are offering gold loans at unprecedented levels.
By August, the gold loan portfolio of banks reached a lifetime high of Rs 2.94 lakh crore, marking the 15th consecutive month of all-time record growth.
Key Reasons Behind the Surge in Gold Loans
- In just one year, the price of 10 grams of gold has increased by 53%.
- The gold loan portfolio, which stood at Rs 1.02 lakh crore in April 2024, has nearly tripled, surprising market analysts.
- Since March this year, monthly growth in gold loans has exceeded 100% on an annualized basis.
- Banks are strict with unsecured personal loans, while interest rates on gold loans remain comparatively lower, making them a preferred option.
As a result, gold loans have become a viable alternative for people who cannot access personal loans.
According to Karthik Srinivasan, Senior Vice President at ICRA Ratings, “As gold prices rise, consumers are able to borrow more against the gold they hold. We expect gold loan demand to continue increasing in the coming months.”
Gold Prices Reach New Peaks
Domestic gold prices continue to hit all-time highs.
- In Delhi, the price of 10 grams of 99.9% pure gold has risen to Rs 1,13,100, up from Rs 78,950 on December 31, 2024.
- So far this year, gold prices have increased by Rs 34,150.
- Silver prices per kilogram have also risen to Rs 1,28,000.
Currently, the demand for gold loans remains strong, with the lower interest rates on gold loans making them more attractive compared to personal loans.
