India’s gold demand rose 10% year-on-year to 151 tonnes in the first quarter of 2026. Investment buying offset a sharp drop in jewellery consumption amid elevated prices, according to the World Gold Council (WGC).
Great Shift
In its Gold Demand Trends report—published with a sharper India focus for the first time—the WGC said jewellery demand fell 19% to 66.1 tonnes, the lowest since the Covid period. In contrast, investment demand surged: bar-and-coin buying rose 34% to 62.3 tonnes, while gold ETF (exchange traded funds) inflows jumped 197% to 19.9 tonnes, marking the strongest quarterly addition on record.
Total investment demand of 82 tonnes exceeded jewellery demand for the first time in a March quarter, underscoring a shift in consumer behaviour. ETFs now account for about a quarter of overall investment demand. Notably, nearly 80% of ETF inflows came in January before moderating sharply in February due to profit-taking and price corrections. By quarter-end, total ETF holdings stood at 115 tonnes.
Price Volatility
Elevated prices also triggered recycling. Between 40% and 60% of jewellery demand was met through exchanges of old gold. Scrap supply rose 20% year-on-year to 31.2 tonnes, as households monetised holdings when prices briefly touched around ₹75,000 per 10 grams before correcting.
Robust early-quarter investment demand lifted imports. Gold imports averaged 83 tonnes in January–February, well above the 2025 monthly average of 53 tonnes. However, March imports slowed to around 20 tonnes due to logistical disruptions following late-February geopolitical tensions in West Asia, which affected shipments from the UAE, a key supply route. Overall, Q1 imports rose 58% year-on-year to 186 tonnes.
“Looking ahead, the summer wedding season and regional festivals should lend some support, building on momentum from Akshaya Tritiya, though high prices remain a near-term headwind for jewellery demand,” said Sachin Jain, regional CEO, India, WGC. He added that gold’s safe-haven appeal and role as a portfolio diversifier should keep investment demand firm, with full-year demand projected at 650–750 tonnes.
The WGC flagged risks to demand in the coming quarters, including a persistent “war premium” in prices, elevated interest rates, and the possibility of a below-normal monsoon weighing on rural incomes. Inflationary pressures linked to geopolitical tensions could further dampen consumption, particularly in price-sensitive segments.
Even so, the underlying trend points to a more investment-led market. While jewellery demand may remain under pressure, sustained investor interest—especially through ETFs—could continue to underpin overall demand.