Gold rush continues: Festive demand holds firm amid record prices and global uncertainty

Gold’s record high of $4,081 (approximately ₹1,23,450) highlights the metal’s role as a safe haven as uncertainty increases over the U.S. government shutdown and its economic impact. Before Diwali and Dhanteras, investor sentiment stays optimistic, with expectations that U.S. rate cuts, a weaker dollar, and ongoing geopolitical tensions will continue to support gold.

“As we head into Dhanteras, we expect sales volume to be about 20% lower than last year, but value to grow by roughly 15–20%, driven by higher gold prices and customers opting for better designs with certified purity. We are observing strong demand for 22K (Karat) coins, lightweight daily-wear pieces, and small diamond purchases. At the same time, wedding shoppers have started booking sets,” says Piyush Gupta, Director, PP Jewellers by Pawan Gupta.

Customers are increasingly asking about purity, making charges, and buyback, which is a positive shift, says market expert. "Our focus remains on fair, transparent pricing, clear guidance, and a smooth in-store experience. We are well-stocked with ample inventory and festive designs across our stores,” adds Piyush Gupta.

In India, festive and wedding demand will boost sales seasonally, although high prices may lead to lighter purchases or a shift toward digital and ETF formats. Overall, gold’s outlook remains strongly positive, with dips likely seen as new buying opportunities amid global economic uncertainty.

Colin Shah, MD of Kama Jewellery, notes that while gold has scaled to record highs just as India's biggest festive season approaches, its impact doesn’t seem to diminish the sheen of the yellow metal in terms of consumer demand. “The appetite of Indian consumers for gold-buying, especially during Dhanteras, is driven by the sentimental value and is considered auspicious, which easily absorbs the spikes in the rising rate of the yellow metal.”

Besides, there is a noticeable shift among consumers towards buying gold in wearable jewellery for a sense of prestige, compared to earlier times when coins and bullion were primarily purchased for investment. This transformation has encouraged manufacturers to focus on design innovation, craftsmanship, and optimising efficiency to maintain the right margins amid fluctuating prices.

“The demand for hallmark-certified jewellery in 9k, 14k, and 18k is trending and is expected to peak at 18-20% during Dhanteras. Along with this, the demand for heavy temple jewellery remains niche, with a steady demand that will continue to sustain,” adds Shah.