Gold loses its shine for Indian buyers as demand plunges 29%

Gold demand in India declined 29% year-on-year to 162.5 tonnes in the July-September quarter of 2026, as higher import duty, soaring prices and Prime Minister Narendra Modi's appeal to curb purchases weighed on consumption, the World Gold Council (WGC) said on Tuesday. The council has projected India's full-year gold demand at 625-675 tonnes. 

Gold demand stood at 229.8 tonnes in the corresponding quarter of 2025, according to WGC's Q3 2026 Gold Demand Trends report. However, in value terms, demand rose 3% to ₹2,41,900 crore from ₹2,35,090 crore a year earlier, reflecting the sharp rise in gold prices. 

The average gold price during the quarter stood at $4,262 per troy ounce (₹1,48,891 per 10 grams), compared with $3,457 (₹1,02,287) in the same period last year. The prices are exclusive of import duty and GST. 

Jewellery demand falls 20%; bar and coin purchases decline 40% 

Jewellery demand declined 20% to 99.9 tonnes in the September quarter from 125 tonnes in the year-ago period. However, in value terms, it increased 16% to ₹1,48,700 crore. 

Investment demand also weakened during the quarter. Bar and coin purchases fell 40% to 55 tonnes from 91.6 tonnes a year earlier. Demand for gold exchange-traded funds (ETFs) declined 50% to 5.3 tonnes from 10.7 tonnes in the corresponding quarter of 2025. 

The Reserve Bank of India (RBI) made no gold purchases during the third quarter of 2026, compared with purchases of 0.2 tonnes in the same period last year, the report said. 

Gold imports slip 46%; recycling also falls 

India's net gold imports declined 46% year-on-year to 114.1 tonnes during the July-September quarter, compared with 211.9 tonnes in the corresponding period last year. 

Gold recycling also fell 12% to 19.2 tonnes from 21.8 tonnes in the year-ago quarter. 

Cultural affinity keeps gold central to Indian households 

Despite fluctuations in demand, gold continues to occupy a central place in India's cultural and social fabric, serving as a store of value, a symbol of wealth and status, and an integral part of religious rituals and family celebrations, the WGC said. 

Among rural households, the preference for gold is also driven by practical considerations, including the portability and perceived security of jewellery as an investment. 

Gold is considered auspicious, particularly in Hindu and Jain traditions, and features prominently in festivals across the country. Apart from Diwali, important occasions for gold purchases include Akshaya Tritiya, Pongal, Onam, and Ugadi in the south; Durga Puja in the east; Gudi Padwa in the west; and Baisakhi and Karva Chauth in the north. 

Gold also plays a major role in personal milestones, particularly weddings in India. Gifting gold is deeply embedded in Indian marriage traditions, with weddings accounting for approximately 50% of the country's annual gold demand, according to the WGC.