Record Gold Prices Reshape India's Buying Trends

India's gold demand declined by 6% year-on-year to 131.4 tonnes during the April-June quarter, according to the World Gold Council (WGC). The decline has been attributed to record-high gold prices and Prime Minister Narendra Modi's appeal urging people to reduce gold purchases to help conserve foreign exchange reserves. The government also increased import duties on gold, further impacting consumer demand. Jewellery demand dropped by 15% to 75.1 tonnes during the quarter. Despite the decline in volume, the value of gold demand surged 50% to ₹1.98 lakh crore due to higher prices. The WGC expects India's total gold demand in 2026 to remain between 650 and 750 tonnes.

While jewellery demand weakened, investment in gold continued to rise. Demand for gold bars and coins increased by 9% to 50.3 tonnes, while Indian Gold ETFs rose to 4.2 tonnes during the quarter. Gold recycling fell by 17% to 19.2 tonnes, and net gold imports declined by 23% to 98.1 tonnes. WGC Regional CEO Sachin Jain cautioned that higher import duties and weaker legal demand could encourage grey market activity and gold smuggling, adding that the council is closely monitoring these developments.