Kavita Chacko

India's gold market showed signs of strengthening, supported by recovering jewellery demand, steady investment demand, increased futures trading activity, and a rebound in imports. These developments  point to improving conditions ahead of the festive season.

Following June's sharp price decline, gold prices have broadly stabilised in July. While overall consumer demand remained subdued, lower prices supported jewellery purchases, ETF inflows and digital gold demand. At the same time, bar and coin demand softened, and gold imports declined further.

India’s gold market cooled in May as higher duties, elevated domestic prices and seasonal softness weighed on demand. Physical buying softened across jewellery, bars and coins, while imports fell from the previous month. ETF investors booked profits after the price rally following the duty hike, resulting in record May outflows before inflows resumed in June; digital gold buying also slowed, though it remained above average.

Gold import duty was raised sharply from 6% to 15%—the steepest increase on record—alongside broader regulatory tightening to curb imports. Weak demand and ample supply have kept domestic gold prices at a significant discount to landed prices, indicating that the higher import duty has yet to be fully priced in. Historical trends indicate that higher duties tend to increase unofficial inflows, although official imports generally remain resilient. Indian gold demand in 2026 is expected to moderate, with jewellery and bar and coin demand estimated to decline by 50–60 tonnes (~10% y/y).

Gold prices partly recovered in April after March’s sharp decline, with domestic discounts narrowing on import curbs and supply constraints. Listed jewellers saw strong Q1 growth, driven by wedding and discretionary demand, higher ticket sizes, and expansion. March ETF inflows were hit by redemptions, though participation rose. The Reserve Bank of India kept gold reserves steady, while imports fell to a nine-month low.

Gold prices have pulled back from end-January highs, pressured by a stronger US dollar and a rise in US Treasury yields. In addition, outflows from gold ETFs, particularly US-listed gold ETFs, – likely indicating tactical profit taking from the sharp rally in January – further weighed on prices. However, the pullback was contained, as heightened geopolitical tensions and ongoing policy uncertainty continued to reinforce gold’s role as a safe-haven asset.

Gold prices scaled fresh highs before turning volatile and are now moving in a holding pattern. The firm price trend supported steady demand across jewellery and investment products, with gold ETFs hitting key milestones in January amid record inflows, holdings and participation. Digital gold purchases surged to new highs, RBI gold holdings edged up slightly, and imports rose, driven largely by strong investment demand

The gold rally continues, driven largely by global uncertainty. Domestic demand remains resilient, supported by strong investment buying, while listed jewellery companies have reported healthy revenue growth in the October–December quarter. December witnessed unprecedented inflows into Indian gold ETFs, taking overall gold demand in 2025 to a historic high.

The inauspicious period from mid-December to mid-January is likely to weigh on jewellery demand, while investment interest is expected to be sustained.

The busy wedding season over the coming months (November–March), with a high number of anticipated weddings, is expected to support jewellery demand. Investment interest in gold is likely to persist amid broadly bullish sentiment around gold.

Gold continues its extraordinary price rally, having reached 48 all-time highs this year. Geopolitical tensions, strong investment demand, dollar weakness, financial market risk and expectations of dovish Fed policy lifted international prices by 11.6% in September and by an additional 7.9% in the first two weeks of October, pushing past the US$4,000/oz milestone.

Gold prices regains momentum, hits new records; discounts narrow in India. Investment demand steers festive gold buying revival.

As the festive and wedding season approaches, there are signs that gold jewellery demand is gaining momentum, and with investment interest holding firm, overall gold demand could receive a boost.

Gold extends gains in July, remains top performer with y-t-d gains of 28%. Seasonal weakness weighs on jewellery sales; investment buying gains ground.

The June–July period typically marks the off-season for gold in India, particularly for jewellery. A recovery in demand is anticipated with the onset of the festive and auspicious buying season from mid-August.