Gold buyers are back: 5 key trends from WGC's latest India gold market report for investors

After a sharp correction in June that kept buyers away, India's gold market is showing signs of recovery, with jewellery demand picking up, gold ETF inflows staying positive, and imports more than doubling in July, according to the latest "India gold market update" by the World Gold Council (WGC).

The report, authored by Kavita Chacko, Research Head, India at the WGC, notes that international and domestic gold prices "gained ground in August, partially reversing June's sharp correction after a period of stability in July."

International gold prices rose 9% in the first two weeks of August to US$4,391 per ounce, while domestic prices gained nearly 7% to ₹1,51,744 per 10 grams. The rupee appreciation against the US dollar partially offset the rise in the international price, limiting gains in domestic prices.

Here are five key trends from the report that gold investors should know.

1. What's behind the recovery?

The report attributes the recovery to "shifting monetary policy expectations, a weaker US dollar, and renewed inflows into gold ETFs".

2. Jewellery demand returns

According to the report, the price correction appears to have been exactly what the market needed.

"Jewellery demand has reportedly strengthened, as consumers viewed recent price action as a buying opportunity," Chacko stated. She added that "deferred purchases returned to the market, resulting in higher footfall and a recovery in demand beyond essential wedding-related purchases".

Manufacturers have reportedly begun receiving higher order flows, and inventory replenishment by jewellers has picked up ahead of the festive season, suggesting growing confidence in seasonal demand.

The report also notes that old gold exchange remains elevated and continues to play an important role in facilitating purchases.

The exchange of old gold for new jewellery has increased market supply and kept domestic prices at a discount to the landed cost, as per the report.

3. ETF inflows continue

Indian gold ETFs continued to attract investor interest in July, though at a slower pace than in June. According to data from the Association of Mutual Funds of India (AMFI), net inflows totalled ₹1,560 crore (US$163 million) during the month, 55% lower month-on-month. Holdings increased by 1 tonne to 120 tonnes. Total assets under management rose 2% month-on-month to ₹1,73,300 crore (US$18.1 billion).

The momentum has carried into August.

The report estimates that the first two weeks of August saw net inflows of ₹1,179 crore (US$124 million). Investor participation also grew, with a further 57,000 new folios added during July, taking the total number of accounts to 12.53 million.

4. Futures market revives

Gold futures trading on the Multi Commodity Exchange of India picked up in July after a softer April-to-June period. Average daily trading volumes rose to 14.9 tonnes, up from an average of 13.5 tonnes over the previous three months. Average daily turnover increased 9% month-on-month to ₹21,400 crore (US$2.2 billion).

However, activity remained below earlier elevated levels. Average daily trading volumes were 59% lower than January's peak and 8% below July 2025 levels. Turnover, however, was 35% higher year-on-year, reflecting the impact of higher gold prices on traded value.

5. Imports more than double

Gold imports rebounded in July after two consecutive months of weakness, suggesting an improvement in demand and inventory replenishment by manufacturers and retailers ahead of the festive season. The report says that the import value rose to US$4.16 billion, more than double June's US$1.97 billion. Import volumes are estimated to have increased to 40-45 tonnes, up from 20 tonnes in June.

While recycled gold, primarily from the exchange of old jewellery, continues to supplement supply, the recovery in imports points to stronger physical demand compared with recent months, Chacko noted.

However, gold's share of total merchandise imports remained relatively modest at 5%, compared with the average 11% during January to March 2026.

The World Gold Council's outlook for the coming months is cautiously optimistic. "Demand conditions are improving, raising expectations of a stronger festive season. While elevated prices may continue to influence jewellery purchases, investment demand remains supportive," the report said.