Gold demand in India is likely to fall to a multi-year low in 2026, according to the World Gold Council’s (WGC) projection. The yellow metal is one of the major import items that drains foreign exchange from India. A lower demand should normally be seen as a positive trend.
The reality, however, is slightly different for the yellow metal and a closer examination of the figures reveals a more troubling reality: Indians are spending substantially more money on considerably less amounts of gold.
During the first nine months of 2026, Indians purchased 443.9 tonnes of gold, which is 12 per cent less than in the corresponding period last year. However, they spent 38 per cent more money to buy gold — Rs 4.82 lakh crore during the nine-month period last year to Rs 6.67 lakh crore in the same period this year.
The trend is even more revealing in the jewellery segment. While purchases declined 18 per cent by weight, money spent on buying jewellery increased 29 per cent. Even in the September quarter, when gold consumption fell 29 per cent by volume, Indians spent three per cent more money compared to last year.
Another factor for the falling demand for gold is the government’s decision to raise import duties from six to 15 per cent. According to industry watchers, a 15 per cent premium on gold purchases via official channels led to some buyers tapping overseas purchases and smuggling.
The gold purchases through unofficial channels increased from three tonnes in September quarter last year to 50 tonnes in the current September quarter.
Gold is not merely a luxury item in India. It is a traditional form of household savings, particularly for women and rural families. So they will never stop buying gold. If their budget is limited, they reduce the quantity of gold purchases, but they will never shun the yellow metal.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: deccanchronicle.com
