‘Young Indians Are Not Anti-Gold’: Experts Explain Why Gen Z Is Choosing SIPs, ETFs & Digital Investing

Last Updated:May 14, 2026, 17:13 IST

Today’s young investor came of age during COVID, market crashes, and YouTube tutorials on buying. They are not chasing safety; they are chasing returns, liquidity and flexibility

Millions of first-time investors have entered equity markets through digital platforms. Young, tech-savvy users, particularly from Tier-2 and Tier-3 cities are driving growth, reports say.

Twenty-eight-year-old IT professional Mrinal Mehra from Noida bought two gold coins earlier this year only after her mother insisted she invest in the yellow metal. But Mehra does not believe in investing in physical gold. Instead, she prefers SIPs, mutual funds, equities and exchange-traded funds.

For traditional Indian families, gold still occupies a unique place — not just as jewellery, but also as a symbol of status, security, savings and emergency wealth. Families have long bought gold during weddings, festivals and major milestones, not merely for ornamentation but because it was considered one of the safest ways to preserve wealth.

But among younger men and women, especially urban millennials and Gen Z investors that relationship with physical gold has changed.

“Younger Indians are not moving away from gold. They are changing the form in which they own it. For the older generation, gold meant jewellery, social status and emergency liquidity in one asset. For younger savers, gold is increasingly a portfolio hedge, bought in smaller amounts, held digitally and tracked like any other financial asset. Jewellery still has cultural value, but investment demand is shifting towards bars, coins, ETFs and digital formats,” said Harshal Dasani, Business Head, INVasset PMS – an investment company in Mumbai.

“The move is not anti-gold,” Dasani further said. “It is anti-friction. Gold remains relevant, but the preferred wrapper is becoming more financial, transparent and liquid”.

Why Younger Investors Think Differently From Their Parents

Previous generations grew up with limited access to financial markets. Bank deposits and physical gold were considered the safest savings options, especially during periods of inflation or economic uncertainty.

“Their parents grew up when banks were slow, mutual funds barely existed, and tangible assets were the only thing you could trust. Gold made complete sense then. Today’s young investor came of age during COVID, market crashes, and YouTube tutorials on buying. They watched their money grow apps. They follow finfluencers, not bank managers. A remarkable 72% of Indians aged 18 to 21 are already invested in equities. They are not chasing safety through tangibility anymore. They are chasing returns, liquidity, and flexibility, and they want it all on a dashboard, not in a locker,” said Tushar Badjate, Director, Badjate Stock Shares Pvt Ltd — a stock broking company in Nagpur.

But over the last decade, retail investing in India has exploded. Retail investors pumped an average for $2 billion a month over the past five years. They have currently become crucial to Indian equity, as per a report by Reuters. Equity-oriented mutual funds recorded net inflows of Rs 404.5 billion in March 2026, up from Rs 259.78 billion in February.

Monthly SIP contributions into mutual funds have repeatedly hit record highs in recent years. Inflows through SIPs rose over 7% to a record Rs 321 billion in March.

Millions of first-time investors have entered equity markets through digital platforms such as Zerodha and Groww. According to India Brand Equity Foundation (IBEF), young, tech-savvy users, particularly from Tier-2 and Tier-3 cities are driving growth.

Instead of asking, “How much gold jewellery should I buy?”, younger investors are increasingly asking, “How much gold exposure should my portfolio have?”

Why Physical Gold Is Becoming Less Attractive

Three things are quietly killing the case for physical gold, explained Badjate. “First, price. At Rs 1,28,100 per 10 grams of 24-karat gold, buying jewellery is no longer a savings decision; it is a luxury one. Second, hidden costs. Making charges, locker fees, insurance, and purity doubts erode returns silently. Third, illiquidity. If you need Rs 50,000 in an emergency, melting your grandmother’s necklace is not a realistic option. Digital gold gives you that money in minutes,” he said.

The World Gold Council has pointed out that gold rarely outperforms a balanced portfolio over decades. Young investors are simply doing that math now, he pointed out.

There are also concerns around storage, theft risk and locker costs. Jewellery resale value is also often lower than expected because buyers rarely recover the full making charges paid during purchase.

This has led many financially aware urban consumers to separate emotional purchases from investment decisions.

“Physical gold will remain important for weddings and tradition, but as an investment format, it leaves too much leakage between price movement and actual investor outcome,” said Dasani.

The Rise Of ‘Financial Gold’

Even though younger Indians may be buying less physical gold, that does not necessarily mean they are abandoning gold itself. According to a nationwide survey conducted in February by Smytten PulseAI – an AI-driven consumer intelligence platform – 62% of Gen Z and Millennials bought the yellow metal under 5 grams.

Instead, many are shifting towards financial or digital forms of gold ownership. Gold ETFs, sovereign gold bonds, gold mutual funds and digital gold platforms are gaining popularity among younger investors because they offer convenience, liquidity and transparency.

“Financial gold means gold exposure without the physical metal, in three forms. Digital gold lets you buy from as little as Rs 10 via apps like Paytm or Google Pay — the metal sits in an audited vault, you hold the ledger entry. Gold ETFs track gold prices on the stock exchange and sit in your Demat account. Sovereign Gold Bonds, issued by the Reserve Bank of India (RBI), are the smartest version — they pay 2.5% annual interest on top of gold’s price appreciation, and capital gains are fully tax-exempt at maturity. Physical gold gives you none of that. The arithmetic simply favours the financial form,” explained Badjate.

This reflects India may slowly be moving from a culture of “gold ownership” to “gold exposure”.

What Are The Alternatives To Physical Gold?

According to Dasani, the alternatives to physical gold are ETFs, gold mutual funds, existing Sovereign Gold Bonds in the secondary market and digital gold where platform risk is properly understood. Another safety-linked option is bank deposits, liquid funds, short-duration debt funds, Treasury products, EPF, NPS and diversified mutual funds.

“The right choice depends on the purpose. For crisis protection and currency hedge, financial gold has a role. For short-term goals, cash and debt are cleaner. For long-cycle wealth creation, equity exposure remains more powerful than gold,” he added.

Investors can also buy shares in companies that mine gold. While they provide exposure to gold prices, their value can be more volatile as it is affected by company performance.

Is India Becoming A Financialised Savings Economy?

“We are partway there, and the trajectory is unmistakable. Millennials and Gen Z together now hold nearly half of India’s Rs 75.35 lakh crore mutual fund pool. Indians under 35 opened 40% of all new SIP accounts in 2025. But here is the honest check on the optimism; mutual fund penetration sits at just 3.6% of Indian households today. A substantial portion of the country’s savings still sits in low-return instruments. AMFI’s (Association of Mutual Funds) stated goal is to reach 15% penetration by 2047. The gap between where India is and where it is headed is not a problem. It is the opportunity,” said Badjate.

For decades, Indian savings were heavily concentrated in physical assets such as gold and real estate. But younger urban consumers are increasingly comfortable with market-linked financial products.

Today’s young investors are more willing to experiment with equities, index funds, ETFs and retirement-focused investment planning than previous generations.

Dasani stressed how SIPs and mutual funds have become a mainstream habit, not just an urban exception. “This is a structural change because savers are beginning to think in portfolios rather than products. The caveat is important. Financialisation improves allocation only when investors understand risk. Participation without discipline can become another form of crowded behaviour. The direction is positive, but education has to keep pace.”

But among younger men and women, especially urban millennials and Gen Z investors that relationship with physical gold has changed.

“Younger Indians are not moving away from gold. They are changing the form in which they own it. For the older generation, gold meant jewellery, social status and emergency liquidity in one asset. For younger savers, gold is increasingly a portfolio hedge, bought in smaller amounts, held digitally and tracked like any other financial asset. Jewellery still has cultural value, but investment demand is shifting towards bars, coins, ETFs and digital formats,” said Harshal Dasani, Business Head, INVasset PMS – an investment company in Mumbai.

“The move is not anti-gold,” Dasani further said. “It is anti-friction. Gold remains relevant, but the preferred wrapper is becoming more financial, transparent and liquid”.

Why Younger Investors Think Differently From Their Parents

Previous generations grew up with limited access to financial markets. Bank deposits and physical gold were considered the safest savings options, especially during periods of inflation or economic uncertainty.

“Their parents grew up when banks were slow, mutual funds barely existed, and tangible assets were the only thing you could trust. Gold made complete sense then. Today’s young investor came of age during COVID, market crashes, and YouTube tutorials on buying. They watched their money grow apps. They follow finfluencers, not bank managers. A remarkable 72% of Indians aged 18 to 21 are already invested in equities. They are not chasing safety through tangibility anymore. They are chasing returns, liquidity, and flexibility, and they want it all on a dashboard, not in a locker,” said Tushar Badjate, Director, Badjate Stock Shares Pvt Ltd — a stock broking company in Nagpur.

But over the last decade, retail investing in India has exploded. Retail investors pumped an average for $2 billion a month over the past five years. They have currently become crucial to Indian equity, as per a report by Reuters. Equity-oriented mutual funds recorded net inflows of Rs 404.5 billion in March 2026, up from Rs 259.78 billion in February.

Monthly SIP contributions into mutual funds have repeatedly hit record highs in recent years. Inflows through SIPs rose over 7% to a record Rs 321 billion in March.

Millions of first-time investors have entered equity markets through digital platforms such as Zerodha and Groww. According to India Brand Equity Foundation (IBEF), young, tech-savvy users, particularly from Tier-2 and Tier-3 cities are driving growth.

Instead of asking, “How much gold jewellery should I buy?”, younger investors are increasingly asking, “How much gold exposure should my portfolio have?”

Why Physical Gold Is Becoming Less Attractive

Three things are quietly killing the case for physical gold, explained Badjate. “First, price. At Rs 1,28,100 per 10 grams of 24-karat gold, buying jewellery is no longer a savings decision; it is a luxury one. Second, hidden costs. Making charges, locker fees, insurance, and purity doubts erode returns silently. Third, illiquidity. If you need Rs 50,000 in an emergency, melting your grandmother’s necklace is not a realistic option. Digital gold gives you that money in minutes,” he said.

The World Gold Council has pointed out that gold rarely outperforms a balanced portfolio over decades. Young investors are simply doing that math now, he pointed out.

There are also concerns around storage, theft risk and locker costs. Jewellery resale value is also often lower than expected because buyers rarely recover the full making charges paid during purchase.

This has led many financially aware urban consumers to separate emotional purchases from investment decisions.

“Physical gold will remain important for weddings and tradition, but as an investment format, it leaves too much leakage between price movement and actual investor outcome,” said Dasani.

The Rise Of ‘Financial Gold’

Even though younger Indians may be buying less physical gold, that does not necessarily mean they are abandoning gold itself. According to a nationwide survey conducted in February by Smytten PulseAI – an AI-driven consumer intelligence platform – 62% of Gen Z and Millennials bought the yellow metal under 5 grams.

Instead, many are shifting towards financial or digital forms of gold ownership. Gold ETFs, sovereign gold bonds, gold mutual funds and digital gold platforms are gaining popularity among younger investors because they offer convenience, liquidity and transparency.

“Financial gold means gold exposure without the physical metal, in three forms. Digital gold lets you buy from as little as Rs 10 via apps like Paytm or Google Pay — the metal sits in an audited vault, you hold the ledger entry. Gold ETFs track gold prices on the stock exchange and sit in your Demat account. Sovereign Gold Bonds, issued by the Reserve Bank of India (RBI), are the smartest version — they pay 2.5% annual interest on top of gold’s price appreciation, and capital gains are fully tax-exempt at maturity. Physical gold gives you none of that. The arithmetic simply favours the financial form,” explained Badjate.

This reflects India may slowly be moving from a culture of “gold ownership” to “gold exposure”.

What Are The Alternatives To Physical Gold?

According to Dasani, the alternatives to physical gold are ETFs, gold mutual funds, existing Sovereign Gold Bonds in the secondary market and digital gold where platform risk is properly understood. Another safety-linked option is bank deposits, liquid funds, short-duration debt funds, Treasury products, EPF, NPS and diversified mutual funds.

“The right choice depends on the purpose. For crisis protection and currency hedge, financial gold has a role. For short-term goals, cash and debt are cleaner. For long-cycle wealth creation, equity exposure remains more powerful than gold,” he added.

Investors can also buy shares in companies that mine gold. While they provide exposure to gold prices, their value can be more volatile as it is affected by company performance.

Is India Becoming A Financialised Savings Economy?

“We are partway there, and the trajectory is unmistakable. Millennials and Gen Z together now hold nearly half of India’s Rs 75.35 lakh crore mutual fund pool. Indians under 35 opened 40% of all new SIP accounts in 2025. But here is the honest check on the optimism; mutual fund penetration sits at just 3.6% of Indian households today. A substantial portion of the country’s savings still sits in low-return instruments. AMFI’s (Association of Mutual Funds) stated goal is to reach 15% penetration by 2047. The gap between where India is and where it is headed is not a problem. It is the opportunity,” said Badjate.

For decades, Indian savings were heavily concentrated in physical assets such as gold and real estate. But younger urban consumers are increasingly comfortable with market-linked financial products.

Today’s young investors are more willing to experiment with equities, index funds, ETFs and retirement-focused investment planning than previous generations.

Dasani stressed how SIPs and mutual funds have become a mainstream habit, not just an urban exception. “This is a structural change because savers are beginning to think in portfolios rather than products. The caveat is important. Financialisation improves allocation only when investors understand risk. Participation without discipline can become another form of crowded behaviour. The direction is positive, but education has to keep pace.”

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