Gold demand in India dropped by 16% during the recent festive season, mainly due to a slump in jewellery purchases, according to World Gold Council data. However, increased investment in gold helped offset the decline, reflecting changing consumer behaviour amid economic uncertainties.
India’s gold demand dropped 16% during the festive season due to lower jewellery sales; increased investment demand helped offset the decline, says WGC.
India’s gold demand experienced a notable decline of 16% during the recent festive period, as revealed by data from the World Gold Council (WGC). Traditionally known for its strong affinity toward gold jewellery during festivals, the Indian market has witnessed a shift with reduced consumer purchases of jewellery. Despite this downturn, the overall demand for gold was partially buoyed by an increase in investment-related buying, highlighting evolving trends among Indian gold consumers.
According to the WGC’s latest report published on October 30, 2025, the decrease in jewellery demand stems from multiple factors, including a cautious consumer approach amid inflationary pressures and rising gold prices. The festive season, which usually triggers a surge in gold jewellery sales, especially during occasions such as Diwali, did not see the usual spikes this year. The data suggests that buyers are prioritizing investments over ornamental purchases to safeguard wealth in uncertain economic times.
Investment demand surged significantly during the same period, as investors sought gold as a hedge against market volatility and currency fluctuations. The WGC report highlights that this investment rush helped offset the slump in the jewellery segment, preventing a more severe drop in total gold demand in India, which remains the world’s second-largest gold consumer after China.
Industry experts attribute the shifting dynamics to several underlying factors. Rising gold prices over the past year have made jewellery purchases less attractive to price-sensitive consumers. Meanwhile, lower household disposable incomes post-pandemic and inflation concerns have led to a more prudent spending approach. Additionally, the increasing availability and popularity of financial gold products such as sovereign gold bonds and gold ETFs have provided investors with alternative avenues to invest in gold without purchasing physical jewellery.
“While the festive period historically is a peak for gold jewellery demand in India, the current economic environment has influenced consumer behaviour. We see a clear tilt towards investment-driven demand, reflecting growing risk awareness among consumers,” said a senior analyst from the World Gold Council.
Regional variations were also noted, with metropolitan areas witnessing a sharper decline in jewellery demand compared to rural markets, where traditional buying patterns still hold some ground. The WGC further noted that despite the drop, gold continues to hold cultural and economic significance in India, with demand expected to stabilize as market conditions evolve.
The price of gold remained relatively high during the period, hovering around $2,100 per ounce, which affected affordability for many consumers. The central bank’s monetary policies and global economic trends have influenced these price levels, underscoring the complex interplay between macroeconomic factors and gold demand in India.
In conclusion, the latest WGC data illustrates a complex picture of India’s gold market during the festive season of 2025. A 16% decline in overall gold demand was mainly driven by subdued jewellery purchases, while escalating interest in investment products cushioned the impact. As India continues to navigate economic uncertainties, patterns in gold consumption are shifting, indicating an ongoing transformation in one of the world’s largest and most traditional gold markets.
