Festive season begins positively for gold buys, even as yellow metal rally continues, say retailers

The resplendent rally in the yellow metal prices, witnessed in over two years, does not seem to have taken the sheen away from the retail sales amid festive build up, even though customer preferences have altered. 

After the dip witnessed in jewellery demand in April-June this year, as per World Gold Council report, customers and investors have now become a little more “measured” and “discerning”, even though festive season has begun on a positive note, say retailers. Customers are preferring lighter-weight and lower-karat jewellery ahead of the festive season.

Gold prices have been on a steady climb, reaching all-time highs of ₹1,10,500 per 10 grams in September 2025, up nearly 49% from ₹74,500 last season. The domestic demand for gold jewellery declined 17% year on year (YoY) in the April-June quarter of CY25, touching pandemic lows of 2020, according to The World Gold Council’s report published on July 31, 2025.

However, gold retailers told Fortune India that traction is visible as the weddings and festivals inject vitality into gold sales. Malabar Group said the festive season this year has begun positively with a 5% year-on-year rise in volumes and a 27% growth in value, despite elevated gold prices. 

“Despite high prices, the Indian sentiment towards gold often outweighs short-term price concerns. Consumers are adjusting their preferences, favoring 18K or 14K jewellery that blends style with price flexibility," MP Ahammad, chairman, Malabar Group, told Fortune India. 

“With high gold prices, customers are becoming more measured in their purchases,” Sandeep Kohli, CEO, Indriya, told Fortune India, adding that the demand for exquisite designs is always there. Indriya is the year-old jewellery brand of Aditya Birla group. According to the World Gold Council, weddings generate about 50% of India’s annual gold demand. 

“Consumers are gravitating more toward lighter-weight and lower-karat jewellery,” Kohli says. He added that high-carat jewellery continues to find favour for bridal and festive occasions, but everyday wear now leans toward more affordable, versatile options. 

Buyers becoming more cautious is a trend visible across retailers. Many customers now prefer coins, lightweight jewellery, and versatile designs that can be styled for multiple occasions, the retailers point out.

Piyush Gupta, director at PP Jewellers, points out that while overall footfall remains stable, customer behaviour has become more deliberate. “The festive charm still brings people in,” Gupta says. “But instead of buying large quantities, many are choosing coins, light-weight jewellery, and versatile designs.” It shows that Indians have developed a more calculated approach to gold purchases, with an emphasis on functionality and investment value.

“Gold is never seen as an expense in India, but as a blessing and an asset,” he adds. 

Even young women are increasingly seeking pieces that are functional, versatile, and timeless. “It’s not really about spending more or less—it’s about how they are choosing to buy,” opines Mira Gulati, founder and lead designer at Mirari, a fine jewellery brand. Her average ticket size now typically falls between Rs 3–4 lakhs, as customers prioritise investment-grade pieces over trend-driven buys.

In fact, GST reforms are also likely to boost consumption. And with the easing inflation, industry experts expect the consumer sentiment to become stronger during Navratri and Diwali.

Gold investment rush

Converging investment motives and practical usage is one of the driving forces behind gold demand. Samit Guha, managing director and CEO of MMTC-PAMP, explains that while central banks have reduced gold purchases, private investors and consumers remain undeterred. Many consumers are choosing to exchange old jewellery or shift to silver as an alternate investment. 

“Even amid an unprecedented surge in gold prices, demand remains strong due to gold’s value as a safe haven asset,” Guha says. He adds that average transaction sizes have actually increased, with buyers now spending between Rs 1.5 and 2.5 lakh per purchase, driven more by price than volume.

It may be noted that the World Gold Council’s Q2, 2025 (April – June) Gold Demand Trends report reveals total quarterly gold demand rose 3% year-on-year to 1,249 tonnes, largely driven by investment flows as geopolitical unpredictability and price momentum spurred interest.

That said, investment in physical gold was up, while jewellery demand dipped over the same period in the previous year said the report. “Bar and coin investments alone increased by 11% year-on-year, adding 307 tonnes. India contributed significantly, adding 46 tonnes in Q2. However, jewellery demand saw a 14% drop in volume globally, and Indian consumption declined 17%, nearing lows last seen during the pandemic in 2020,” said the report.