Mumbai (Economy India): India’s gold demand witnessed a sharp contraction in 2025 as record-high prices and shifting consumer behaviour significantly dampened purchases, according to the latest report released by the World Gold Council (WGC).
As per WGC’s “Gold Demand Trends 2025” report, India’s total gold demand declined by 11 per cent year-on-year to 710.9 tonnes in 2025, compared with 802.8 tonnes in 2024. The fall highlights growing price sensitivity among Indian consumers amid elevated global gold prices and macroeconomic uncertainties.
📉 High Prices Alter Buying Behaviour
The World Gold Council noted that persistently high gold prices led consumers to postpone purchases, opt for lighter jewellery, or shift towards alternative financial instruments.
“Record prices have fundamentally altered gold-buying behaviour in India, particularly in jewellery consumption,” the WGC report said.
Gold prices remained near historic highs throughout 2025, driven by global factors such as geopolitical tensions, inflationary pressures, central bank buying, and a weaker US dollar. These factors made gold less affordable for traditional buyers, especially in rural and semi-urban markets.
💍 Jewellery Demand Takes the Biggest Hit
Jewellery, which traditionally accounts for the largest share of India’s gold demand, saw the most pronounced impact. Consumers increasingly preferred recycling old jewellery, exchanging gold, or reducing purchase volumes during festivals and wedding seasons.
Industry experts say that while weddings continued, average ticket sizes dropped sharply as buyers focused on value and necessity rather than investment.
📊 Investment Demand Shows Mixed Trends
While jewellery demand weakened, investment demand—particularly for gold bars and coins—remained relatively resilient, supported by gold’s status as a hedge against inflation and market volatility. However, even investment demand could not fully offset the decline caused by high prices.
Market analysts also pointed out that rising interest in digital gold, gold ETFs, and sovereign gold bonds diverted some demand away from physical gold.
🔮 Outlook for 2026: Further Softening Expected
Looking ahead, the World Gold Council has projected that India’s gold demand in 2026 could fall further to a range of 600–700 tonnes, depending on price trends, inflation, rural income growth, and macroeconomic stability.
“If prices remain elevated, demand is likely to stay under pressure, though any correction could revive consumer interest,” the report added.
🏦 Policy, Income Growth to Play Key Role
Experts believe that government policies, rural income growth, easing inflation, and stability in global markets will be critical in determining gold demand trends going forward. A normal monsoon and higher disposable incomes could partially cushion the decline.
Despite short-term challenges, India remains one of the world’s largest gold consumers, with deep cultural and economic links to the precious metal.
(Economy India)
