Gold gets costlier, Indians buy less; but spending soars to record ₹1.98 lakh crore

Gold demand in India fell 6% year-on-year to 131 tonnes in the April-June quarter of 2026 as record-high prices curbed purchases, the World Gold Council (WGC) said on Thursday.

However, the total value of gold bought touched an all-time high for the quarter due to elevated prices.

Jewellery demand recovered 14% sequentially to 75 tonnes from a weak first quarter but was down 15% from a year earlier.

India nevertheless remained the world's largest jewellery market during the quarter, accounting for 27% of global demand.

The report said gold demand was affected by elevated prices, the mid-May import duty hike, Prime Minister Narendra Modi's appeal to postpone gold purchases and a seasonally inauspicious buying period.

"However, it's been a record in terms of the value of demand. So, consumption was ₹1,98,100 crores, compared with ₹1,32,500 crores in the same period in 2025, which is up by 50 per cent compared to the second quarter of 2025, highlighting that consumers continue to prioritise gold even in a high-price environment," WGC Regional CEO, India, Sachin Jain told PTI.

Going forward, for the year, WGC estimated the demand to stay between 650 and 750 tonnes.

"We still see demand in the range of 650 to 750 tonnes for this year. However, given the current geopolitical landscape, interest rates, and inflation, I think we should be somewhere in the middle of this range. If there is more correction in gold prices and the customs duty is reduced, then we could get to the upper end of this range," Jain added.

Investment demand, comprising bars, coins and exchange-traded funds (ETFs), eased to 54 tonnes from an average of about 100 tonnes over the previous three quarters, but remained above the long-term quarterly average of 49 tonnes.

Digital gold purchases also moderated during April and May before recovering partially in June.

Bar and coin demand declined 19% sequentially to 50 tonnes as the pace of price appreciation slowed, while ETF demand dropped sharply from the record level seen in the previous quarter.

However, the report noted that first-half ETF demand touched a record 24 tonnes, with total holdings rising to 119 tonnes by the end of June.

"These trends reinforce gold's growing appeal not only as a traditional store of wealth but also as a strategic investment that provides stability and diversification in an increasingly uncertain economic environment. Looking ahead, the festive and wedding season in the second half is expected to support demand. While elevated prices may continue to influence buying patterns, Indian consumers have consistently demonstrated their ability to adapt," Jain said.

The average gold price in the second quarter was USD 4,506.3 an ounce in comparison to USD 3,280.4 in the corresponding period of 2025.

In India, the average quarterly price of gold during April-June was ₹1,50,744.8 (without import duty and GST) in comparison to ₹94,875.9 in the same period last year.