Top News

India's gold demand rose 10% year-on-year to 151 tonnes in the first quarter of 2026, led by a sharp surge in investment buying even as jewellery volumes declined due to record-high prices, the World Gold Council (WGC) said on Wednesday.

In value terms, total demand nearly doubled, jumping 99% to a record ₹2.28 lakh crore (USD 25 billion) during the quarter. "Indian gold demand rose 10% y/y to 151t in Q1; in value terms it surged 99% y/y to a Q1 record," the WGC said in its report 'Gold Demand Trends: India Focus Q1 2026'. The report highlighted a clear shift in consumption patterns, with investment demand taking the lead. "Investment demand led growth, with volume up 54% y/y to 82t and value up 179% y/y, outpacing jewellery demand," it said. Bar and coin demand stood at 62 tonnes, nearly matching jewellery demand of 66 tonnes, while gold exchange-traded funds (ETFs) saw record inflows. Domestic gold prices surged 20% quarter-on-quarter and 81% year-on-year to a record average of ₹151,108 per 10 grams during the quarter, before correcting by around 15% later in the quarter. The rally, aided partly by a weaker rupee, boosted overall spending but weighed on volumes, particularly in the price-sensitive jewellery segment. Jewellery demand weakens Gold jewellery consumption dropped to its second-lowest first-quarter level since 2000, but value demand rose 47% to a record ₹99,900 crore. Demand was largely driven by wedding purchases, along with discretionary buying from affluent consumers opting for heavier pieces, while mass-market buyers shifted to lighter and lower-carat jewellery. "A significant share of jewellery sales was driven by the exchange of old gold, accounting for around 40%-60% of transactions," the WGC said. India accounted for 22% of global jewellery demand, remaining the second-largest market after China. Investment demand reshapes market Bar and coin demand rose 34% to 62 tonnes, nearly matching jewellery demand, in a significant departure from traditional consumption trends. Gold ETFs recorded their strongest quarter on record, with net inflows of 20 tonnes. "Q1 2026 was a record quarter for Indian gold ETFs, with net demand of 20t, driven by strong investor participation," the WGC said, noting that nearly 80% of inflows came in January. Assets under management of gold ETFs surged 191% from a year earlier to about 1.7 trillion rupees, with India accounting for 32% of global ETF demand, second only to China. Outlook The World Gold Council said India's gold demand is likely to be anchored by investment interest, supported by price momentum, geopolitical risks, and subdued domestic financial markets However, risks such as a potentially weak monsoon, inflationary pressures and external uncertainties could weigh on income growth and dampen jewellery demand, particularly in rural and 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," it added.