India’s Gold Demand Likely to Fall in 2026 as Jewellery Sales Slump: WGC

India’s gold demand is expected to decline in 2026, weighed down by weak jewellery consumption caused by sharply higher prices, even as investment demand remains strong. According to the World Gold Council (WGC), the overall demand outlook reflects a shift in consumer behaviour amid record bullion prices and volatile markets.

India Gold Demand Outlook for 2026

Demand Seen at 600–700 Tonnes

India’s gold demand in 2026 is expected to range between 600 metric tonnes and 700 metric tonnes, compared with 710.9 tonnes in 2025, which was already the lowest level in five years, said Sachin Jain, Chief Executive of WGC India, in comments to Reuters.

This follows an 11 per cent decline in gold demand last year, highlighting the sustained pressure on consumption from rising prices.

Jewellery Demand Hit by Price Volatility

Consumers Prefer Stable Prices

Jewellery remains the largest component of India’s gold consumption, but buyers are increasingly cautious. Jain noted that jewellery consumers typically favour stable gold prices, while recent volatility has stretched household budgets.

“Jewellery buyers prefer stable prices of gold, but the volatile rising prices of recent months have far outstripped consumer budgets,” Jain said.

Jewellery Demand Falls to Multi-Decade Low

According to the WGC report published on Thursday:

• Jewellery demand fell 24 per cent in 2025 to 430.5 metric tonnes

• This was the lowest level in nearly three decades, excluding 2020, when Covid-19 disrupted demand patterns

Investment Demand and ETF Inflows Surge

Gold Investment Gains Momentum

While jewellery demand weakened, investment demand rose 17 per cent in 2025 to 280.4 tonnes, marking its highest level since 2013, the WGC said.

Investment accounted for a record ~40 per cent of India’s total gold consumption in 2025, up sharply from the historical average of around 25 per cent.

Gold ETFs See Record Inflows

Gold exchange-traded funds (ETFs) saw strong momentum:

• ETF inflows jumped 283 per cent in 2025

• Total inflows reached a record ₹42,960 crore ($4.67 billion)

“Inflow into exchange-traded funds(ETFs) will continue to grow,” Jain said. “The stock market hasn't performed very well in 2025, so investors are looking for better returns from gold.”

Gold Prices vs Equity Markets

Gold Outperforms Stocks in 2025

• Domestic gold prices surged 76.5 per cent in 2025

• India’s benchmark Nifty 50 rose 10.5 per cent during the same period

This stark contrast has made gold a more attractive hedge for investors amid equity market volatility.

WGC Outlook: Shift From Jewellery to Investment

The WGC expects the structural shift toward investment demand to continue.

“Equities may stay subdued and less attractive amid high valuations, tariffs, and foreign outflows,” the WGC said. “A gradual shift from jewellery to pure investment demand should continue to support bars and coins.”

Scrap Gold Supply Declines Despite High Prices

Scrap Supply Falls 19 Per Cent

Historically, high gold prices encourage households to sell old jewellery and coins, increasing scrap supply. However, 2025 defied this trend:

• Scrap supply declined 19 per cent year-on-year

• Total scrap supply stood at 92.7 tonnes

The WGC attributed this to expectations of further price gains, even as gold hit fresh record highs almost every week.

What Lies Ahead for India’s Gold Market

While investment demand and ETF inflows are likely to remain strong, weak jewellery consumption is expected to cap overall gold demand growth in 2026. Persistently high prices, changing consumer preferences, and uncertain equity markets will continue to reshape India’s gold consumption pattern, reinforcing gold’s role as an investment asset rather than purely a cultural or consumption product.