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Gold Demand in India Falls 6% Amid Record Prices (Img Pinterest)
New Delhi: The demand for gold has fallen by 6 per cent year on year basis in the April-June quarter because of high prices, increased customs duty, and weak seasonality, as per the World Gold Council (WGC).
Demand for gold fell to 131.4 tonnes in the quarter two of 2026 against 139.7 tonnes in the quarter two of last year, as reported in the latest Gold Demand Trends report by WGC.
But even in the context of fall in demand, the value of gold consumption touched an all-time high on account of rising prices.
As per WGC, the value of gold demand in India was at Rs 1.98 lakh crore in quarter two while in quarter two of 2025, it was at Rs 1.32 lakh crore.
Sachin Jain, Regional CEO, India, World Gold Council, said that rise in value indicated continued love of Indian consumers for gold despite a difficult price scenario.
Gold jewellery demand, which accounts for the biggest portion of total gold demand in India, experienced a much steeper decline in the quarter under review.
Gold jewellery demand declined 15% to 75.1 tonnes from 88.8 tonnes seen in the corresponding quarter in 2022.
According to WGC, the main reason for this decline included seasonality, increased customs duty, and an appeal by Prime Minister Narendra Modi to make minimum non-essential gold purchases.
Earlier this May, the Prime Minister appealed to Indians to curb their purchases of non-essential gold and try to explore other ways of saving.
Though jewellery purchases declined, investment demand proved to be resilient in Q1.
The purchases of gold bars and coins were up 9% year on year at 50.3 tonnes. Net inflow into Indian Gold ETFs was seen at 4.2 tonnes despite outflow globally from gold-backed ETFs.
As stated by the WGC, this shows that gold is becoming more and more popular as a financial instrument.
The WGC expressed its concerns over growing gray market operations due to increased duties on imports.
Sachin Jain pointed out that illegal gold flowing into the market continues to be a big problem for the industry, as there have been cases of increased gold smuggling.
For the entire year, the WGC projects gold demand in India to range between 650 and 750 tonnes.
According to the council, variables like global geopolitical volatility, interest rates, inflation and future gold price trends will affect demand.
A fall in gold prices or a lowering of customs duty will drive the demand towards the upper end of the range, the WGC said.
The coming festive and wedding season in the second half of the year should help gold buying, even as high prices could still affect consumer decisions.
