Gold's "Love Trade"

Whenever I see the U.S. media suggest that cryptocurrencies, especially Bitcoin, will replace gold, I give my head a shake and remind myself that there’s a big world out there consistently voting with its wallet.
 
India and China, the two most populous countries, together make up about 35 percent of global population, and right now they’re responsible for the lion’s share of serious physical gold buying on the planet. In the FY 2025-26, India imported 721 tonnes, worth a record $71.98 billion, a 24 percent jump in value over the previous year (even though volumes were slightly lower). With prices high, people bought fewer ounces but spent significantly more money. 
 
China has been even more aggressive. In the first five months of 2026 alone, it imported 692 tonnes, up 76 percent from the same period last year. May was particularly strong at 163 tonnes, the highest monthly figure in over two years. Combined, India and China consumed roughly 40 percent of global annual gold production last year. This isn’t speculative frenzy. It’s structural demand that has shown up year after year for centuries.
 
Gold in these two countries isn’t just another asset class, it’s part of the cultural DNA. In India, it’s tied to Lakshmi, the Hindu goddess of wealth, prosperity, fortune, and abundance. Because gold does not tarnish or corrode, it symbolizes purity, permanence, and enduring prosperity, qualities associated with the goddess. 
 
Families give gold as Streedhan, meaning “woman’s wealth.” It belongs exclusively to the bride, not to her husband or his family. It serves as her own portable security that nobody can take away from her. No divorce proceedings needed. The gold is bought mainly at Akshaya Tritiya and Dhanteras, auspicious days for Hindus. Purchasing gold at those times is meant to bring prosperity in the year ahead. In China, gold has carried imperial weight for centuries and still appears in traditional dragon-and-phoenix wedding sets. These aren’t investment decisions made after reading a Bloomberg terminal. They are historical and cultural rituals that go back millennia. They survive GDP growth, smartphones, and whatever new digital product Wall Street is trying to sell this quarter.
 
These traditions are what my good friend Frank Holmes of U.S. Global Investors calls the Love Trade, the steady, almost boring demand that comes from rising prosperity and cultural habit rather than fear. The Fear Trade gets all the headlines during crises, the Love Trade is what actually moves the needle, and nowhere is it more powerful than in these two countries. It doesn’t need a war or a currency collapse. It just needs weddings, festivals, and families who believe that handing over a piece of yellow metal carries more meaning than tapping a few buttons on an app.
 
China’s history with paper money should be required reading for anyone who thinks digital tokens such as Stablecoins are going to sweep everything aside. The Song Dynasty tried it in the 11th century with Jiaozi. It worked fine until the government got greedy and printed too muchof it. Sound familiar? Later Chinese dynasties kept repeating the experiment and kept getting the same result. By the mid-1400s, they had mostly gone back to silver and physical metal. 
 
That memory plays an important role in Beijing’s decision-making. It’s why China has been quietly stacking physical gold for 15 years while simultaneously cracking down on the leveraged paper-gold casino that was running through the banks. Chinese authorities are not against gold ownership. They’re against the kind of synthetic nonsense that creates volatility and systemic risk. Another reason for this crackdown is to take away the West’s control over gold pricing, which has long been manipulated through leverage and derivatives.
 
India has also experimented with financial engineering to curb what it sees as insatiable gold demand. Its Gold Monetization Scheme was meant to encourage families to deposit their jewelry and bars with banks in exchange for a bit of interest. After more than ten years, it has managed to pull in only about 39 tonnes, versus an estimated 25,000 to 35,000 tonnes sitting in homes, lockers, and temples across the country.
 
The reason is simple: most Indian families don’t see their gold as an idle financial asset. They see it as family security and tradition. Like many citizens around the world, they don’t fully trust governments and have little interest in lending out their gold so some banker can make a spread. Gold remains a trusted and, in many cases, sacred asset.
 
As for Bitcoin, its proponents keep making outrageous claims that it will replace gold’s monetary status. Bitcoin can be a useful speculative tool for people who have high risk tolerance and hope to get rich quick. But trying to position it as a cultural replacement for gold in India or China is like trying to sell sand in the Sahara. 
 
Bitcoin can’t be worn at a wedding. It doesn’t get passed down as Streedhan. It has no rituals, no festivals, and no five-thousand-year track record of surviving every monetary experiment humans have thrown at it. Additionally, in India, digital assets face a 30 percent tax on gains, yet demand has remained remarkably resilient. Add up every Bitcoin held in both countries and you’re still looking at a tiny number compared to the trillions sitting in household physical gold.
 
The deeper issue is that gold already does what these two ancient societies need it to do. It carries memory. It signals status. It provides a form of portable security that has survived empires, revolutions, and every clever new monetary idea that has come along. 
 
Bitcoin is still trying to prove it can survive a full business cycle without government hostility or extreme volatility wiping out a generation of holders. God help Bitcoin holders in the next stock market crash — and one is coming.
 
I prefer the odds of what 35 percent of the world’s population desires over what the 4 percent is hoping for. I’ve been in business long enough to know that demand driven by culture rather than spreadsheets tends to be remarkably sticky. India and China have been proving that point for centuries. The Love Trade and a history of trust aren’t going away just because someone invented a new digital token. 
 
Gold will keep showing up at weddings and festivals long after the current hype cycle has moved on to whatever comes next. It has long since passed the test these two civilizations have given it. Newer alternatives, Bitcoin included, are still waiting to take the exam.