5 things happening in the gold market ahead of Diwali and Dhanteras 2026, as per WGC

1. Prices have steadied after September's sharp fall

Gold retreated in September, ending the month at $4,176 an ounce, down 8.5% month-on-month, as higher US Treasury yields, a stronger dollar and reduced futures positioning weighed on prices despite strong global ETF inflows. Domestic prices fell by a more modest 4.8% to ₹1,47,613 per 10 grams, with rupee weakness cushioning part of the decline. Gold prices have stayed rangebound in October with mid-month domestic prices around 1% lower partly due to gains in the rupee.

2. The discount to import parity has almost vanished

Domestic gold price discounts narrowed sharply in October, from an average of $66 an ounce in September to $8 an ounce as of October 16. The WGC attributed this to improving seasonal demand. Though, it noted that the continued discount to import parity signals adequate domestic supply with industry feedback citing old-gold supply and unofficial inflows as contributing factors. For buyers, the bargain has shrunk compared with a month ago even as demand stays firm.

3. Jewellery demand is picking up, with lighter pieces leading

Seasonal demand is gaining traction as the market enters the key festive and wedding period, with the recent price decline providing support. Manufacturers are reporting healthy order flows as retailers replenish inventories and industry feedback points to improving in-store footfall. Alongside heavier marketing and promotional activity, jewellers have focused on fresh designs and lighter weight pieces, which offer greater wearability, while old-gold exchange remains an important feature with jewellers offering additional incentives to trade existing holdings for new purchases

Bar and coin demand has moderated as price momentum eased, tempering some of the investment-related buying seen during the earlier price rally.

Listed jewellers, meanwhile, had a strong quarter, reporting double-digit revenue growth of 20-30% year-on-year in the July-September period despite elevated and volatile prices and a less favourable festive calendar.

Growth came from both same-store performance, up around 20%, and network expansion, with the largest players adding 42 stores during the quarter, and retailers are focusing on tighter inventory control to manage working capital pressure from high gold prices

4. Gold ETFs saw their strongest inflows in seven months, but a fresh subscription curb is in place

Indian gold ETFs recorded net inflows of ₹44.5 billion ($466.2 million) in September, the highest in seven months, adding nearly 3 tonnes and taking cumulative holdings to 124 tonnes. Inflows continued into October, with an estimated ₹17.22 billion ($181 million), or about 1.2 tonnes, in the first half of the month.

Investor participation jumped as well as ETFs added 140,231 new folios in September, against around 4,000 in August, taking total folios to 12.68 million. Cumulative AUM, however, still fell 2.5% month-on-month to ₹1,863 billion ($19.5 billion), reflecting the 7% fall in domestic gold prices during September, with gold ETFs accounting for 2.25% of overall mutual fund AUM

Buyers should also take note of a new restriction: mutual funds have announced a temporary suspension of fresh and additional subscriptions into gold savings funds/Fund of Funds with effect from October 16, 2026, reportedly following discussions with SEBI and likely aimed at lowering gold imports. Existing SIPs and redemption requests are unaffected. Direct investment in gold ETFs can also continue, including creation of ETF units and normal functioning of market makers and authorised participants

The WGC added that the FoF segment is sizeable, with cumulative AUM of ₹633 billion ($6.63 billion) as of end-September, about one-third of the ₹1,863 billion held in gold ETFs overall. However, the report judged the overall impact as "relatively contained" given that direct ETF investments and existing FoF SIPs continue.

5. Digital gold is holding up better than bars and coins

Digital gold demand remained firm in September, with purchases of ₹25.9 billion ($271 million), up 4% from August and 83% higher than a year earlier. Volumes reached 1.7 tonnes, and year-to-date purchases totalled 16.3 tonnes against 9.2 tonnes in the same period of 2025, reflecting a rise of 76%. Meanwhile, MCX gold futures activity eased from August's five-month high, with average daily volumes down 4% month-on-month to 18.3 tonnes and turnover down 10% to ₹265 billion ($2.8 billion), even as volumes and turnover stayed about 20% above the April-August averages.

Gold imports, too, fell sharply in September to $1.8 billion, the lowest level since March 2024 and down 22% month-on-month and 81% year-on-year, with gross import volumes estimated at around 20 tonnes and gold's share of total merchandise imports dropping to 2.4% from 14% a year earlier. The WGC said this reflected greater availability of domestic supply, including recycled gold generated through old-gold exchange programmes, rather than weak consumer interest.

Looking ahead, the WGC report expects the festive and wedding season to provide "a favorable near-term demand backdrop, with lower prices supporting jewellery spend although elevated price levels may continue to limit volume growth".