Gold demand in India declined sharply by 28% during the first phase of the festive season, spanning from Raksha Bandhan to Onam, according to data from the India Bullion & Jewellers Association (IBJA). This marks the steepest drop in three years, attributed mainly to soaring gold prices, which saw a nearly 49% year-on-year increase.

Retail prices reached approximately Rs.10,540 per 10 grams (including GST), up from Rs.74,500 during the same period last year. The significant price surge impacted consumer sentiment, leading many to either postpone purchases or opt for more affordable alternatives like lower-karatage and lightweight jewellery.

While overall sales volume fell, some jewellers reported a rise in sales value—by as much as 25–30%—due to the higher prices. The average weight of lightweight jewellery also declined, shifting from 7–12 grams to around 7–10 grams.

In urban and northern markets, there has been growing demand for 18K jewellery, which offers classic designs at more accessible price points. Southern markets continue to show a preference for traditional 22K jewellery, though typically in lighter weights to accommodate tighter budgets.

Lower-karat options such as 14K and 9K gold have gained significant traction, particularly among cost-conscious consumers. Jewellers noted a notable rise in 9K gold jewellery sales, including from major brands introducing collections in this segment.

Despite the drop in jewellery purchases, investment demand for gold has remained stable, with consistent interest in gold coins and small jewellery pieces, particularly in the 2–10 gram range.

Some retailers reported a modest increase in volume and a strong uptick in sales value in the lead-up to the festive season, and expectations remain optimistic for stronger demand during Navratri and Diwali. Manufacturers are also adjusting production strategies to align with changing consumer preferences, focusing more on lightweight and lower-karatage designs.