Indian gold demand rose 10% y/y to 151t in Q1; in value terms it surged 99% y/y to a Q1 record of INR2,275bn (US$25bn).
Investment demand led growth, with volume up 54% y/y to 82t and value up 179% y/y, outpacing jewellery demand.
Bar and coin demand (62t) nearly matched jewellery demand (66t), while ETFs reached a record high.
Record spending, up 47% y/y helped cushion volume softness in gold jewellery (-19% y/y).
India remained a key driver of global gold demand, ranking second in both jewellery and investment segments.
Total gold demand in Q1 rose 10% y/y to 151t, although volumes remained 9% below their long-term average. In value terms, demand nearly doubled, surging 99% y/y to a record INR2,275bn (US$25bn). Strong investment demand of 82t, led by bars, coins and ETFs, more than offset weaker jewellery volumes (66t), while industrial demand held steady (2t).
The domestic gold price (MCX spot gold price) rose sharply in Q1 2026: up 20% q/q and 81% y/y to a record quarterly average of INR151,108/10g, outpacing international (LBMA Gold Price PM) gains of 18% q/q and 70% y/y. The stronger domestic performance was largely driven by INR weakness (down 3% q/q and 6% y/y). Prices hit record highs during the quarter (US$5,405/oz and INR175,231/10g) before correcting by ~15%. Despite this pullback, the uptrend prevailed, and Q1 ended with domestic prices 10% higher and international prices up 6%.
| Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 | q/q % change | y/y % change | ||
| Jewellery | Tonnes | 82 | 89 | 125 | 145 | 66 | -55 | -19 |
| INRbn | 681 | 842 | 1279 | 1828 | 999 | -45 | 47 | |
| US$bn | 8 | 10 | 15 | 21 | 11 | -47 | 39 | |
| Bars and Coins | Tonnes | 47 | 46 | 92 | 96 | 62 | -35 | 34 |
| INRbn | 389 | 438 | 937 | 1207 | 941 | -22 | 142 | |
| US$bn | 4 | 5 | 11 | 14 | 10 | -24 | 129 | |
| ETF | Tonnes | 7 | 2 | 11 | 18 | 20 | 13 | 197 |
| INRbn | 56 | 21 | 109 | 221 | 300 | 36 | 437 | |
| US$bn | 0.6 | 0.2 | 1.3 | 2.5 | 3.3 | 32 | 409 | |
| Industrial | Tonnes | 2 | 2 | 2 | 3 | 2 | -24 | -8 |
| INRbn | 21 | 19 | 25 | 38 | 35 | -8 | 68 | |
| US$bn | 0.2 | 0.2 | 0.3 | 0.4 | 0.4 | -11 | 59 | |
| Total Demand | Tonnes | 137 | 139 | 230 | 262 | 151 | -43 | 10 |
| INRbn | 1146 | 1320 | 2351 | 3294 | 2275 | -31 | 99 | |
| US$bn | 13 | 15 | 27 | 37 | 25 | -33 | 88 |
Source: Metals Focus, Bloomberg, World Gold Council
*Data to 31 March 2026
India’s gold jewellery demand softened in Q1 as record-high prices weighed on affordability. Even so, spending surged to a record high, underscoring resilient consumer demand. Volumes declined 19% y/y to 66t – the second-lowest first-quarter on record since 2000 – largely reflecting an 81% y/y rise in domestic gold prices. In contrast, value demand rose 47% y/y to a record INR999bn (~US$11bn), highlighting higher overall spending despite lower volumes.
Demand during the quarter was led by wedding-related purchases, with some discretionary buying from higher-income purchasers who continued to favour heavier pieces. Meanwhile, higher prices continued to nudge mass-market consumers toward lighter-weight, lower-carat, and studded jewellery. A significant share of jewellery sales was driven by the exchange of old gold, accounting for around 40%–60% of transactions across retailers. There was also some migration from jewellery to gold investment products, as highlighted by investment’s rising share of overall demand (Chart 6).
Strong consumer spending underpinned a robust Q1 for leading listed jewellers with revenue growth ranging from 32% to 124% y/y. Gains were driven by higher ticket sizes, rising traction in plain gold jewellery, and a sharp increase in coin sales, while digital channels continued to gain momentum. Retailers also maintained their expansion pace, adding 7–38 stores during the quarter, despite some delays in store openings linked to geopolitical supply disruptions.
Continued store expansion and associated stocking requirements have kept industry inventory levels elevated at around 31t in Q1, well above the long-term average of 15t.
In a global context, India accounted for 22% of jewellery demand in Q1 and ranked as the second-largest market after China (Chart 4). While volumes declined, the drop was less severe than in other regions, suggesting relatively stable underlying demand dynamics.
A structural shift in gold demand is becoming more pronounced, with investment gaining momentum. Investment demand, across bars and coins and ETFs rose 54% y/y to 82t in Q1, offsetting weakness in jewellery demand.
This shift is reflected in the demand mix: investment demand rose to nearly 70% of total demand in Q1 (Chart 6), while jewellery’s share fell to around 30%,1 the lowest level in our data going back to 2000.
This trend is also visible across other formats. Digital gold purchases via the Unified Payments Interface (UPI) remained strong in Q1. Transaction values nearly quadrupled y/y In January and February, with gross purchases of INR70bn, equivalent to 3.3t.
Bar and coin demand rose sharply in Q1, increasing 34% y/y to 62t, the highest first-quarter level since 2013, while value demand surged 142% y/y to INR941bn. Elevated gold prices – especially early during the quarter when gold outperformed other domestic assets – drove investment-led buying in bars and coins.
The strength of demand in this segment marked a notable shift in the pattern of consumption, with bar and coin investment nearly matching jewellery demand (66t); a departure for a market in which jewellery has traditionally dominated. Bars and coins accounted for 52% of total domestic gold demand (net of recycling), the highest level in our data going back to 2013 and a significant increase from a year ago (42%).
India made up for 13% of global bar and coin demand, with y/y growth outpacing most major markets, barring China (Chart 7).
Q1 2026 was a record quarter for Indian gold ETFs, with net demand of 20t, driven by strong investor participation amid elevated gold prices and subdued domestic financial markets. Notably, nearly 80% of these inflows were concentrated in January, reflecting a surge in early-quarter demand. Flows slowed sharply in February and March, falling over 80% from January’s peak as softer prices triggered profit-taking and led to higher redemptions. Even so, dip-buying helped support flows during price corrections.
Overall, holdings rose to 115t by the end of the quarter, while AUM increased 191% y/y and 34% q/q to INR1.7trn (~US$18.5bn).
As a share of total domestic demand, ETFs rose to 13% from 5% a year ago. Globally, India accounted for 32% of ETF demand in Q1, making it the second only to China.
The RBI’s gold reserves have remained steady at around 880t since mid-2025. However, gold’s share in total foreign exchange reserves has increased from 12% in March 2025 to 17% in March 2026, largely reflecting valuation gains in gold holdings amid rising prices.
Gold imports averaged 83t in the first two month of 2026, well above the 2025 monthly average of 53t, largely supported by strong investment demand during January. Notably, ETF demand in January alone accounted for 16% of monthly imports. The late-February geopolitical developments in the Middle East and the related logistical disruptions to gold shipments from the UAE - a key gold import route for India - impacted bullion imports in March. Imports in Q1 at 186t was up 58% y/y.
Net recycling (scrap supply) in Q1 at 31.2t was up 20% y/y and 44% q/q. The increase was partly driven by the base effect, as recycling volumes were weak in Q1’25 and remained subdued through much of the year. Notwithstanding this quarterly increase, gold holders largely opted to monetise their holdings rather than liquidate, keeping scrap supply relatively muted despite a rise of over 80% in the gold price.
Instead, borrowing against gold continued to gain traction. Banks and non-banking financial companies (NBFCs) reported strong growth in retail lending backed by pledged jewellery. Outstanding retail loans at banks reached INR4.3tn (~US$47.2bn) as of end -February, up 124% y/y.
India’s gold demand is likely to be anchored by investment interest, supported by price momentum, geopolitical risks, and subdued domestic financial markets. However, a rise in external risks and a potentially below-normal monsoon could weigh on growth and incomes, while inflationary pressures, partly driven by Middle East tensions, may dampen consumption, especially in price-sensitive segments. Amid these headwinds, investment demand is likely to remain firm, while jewellery demand may continue to face pressure, reinforcing the investment-led trend.
