India’s gold consumption is projected to decline 12% this year to 650–700 tonnes, down from 802.8 tonnes in 2024, as a sharp rise in prices dampens demand in one of the world’s largest bullion markets, according to the World Gold Council (WGC) India.

Gold prices have surged over 65% since January, pushing the retail price to around Rs.1,32,394 per 10 grams. Elevated prices have strained affordability, particularly for jewellery buyers, even during the peak wedding season.

Despite higher prices, consumers continue to prefer 22-karat lightweight plain gold jewellery, rather than shifting to lower-karat options such as 18K, 14K, or 9K—despite the availability of hallmarking for these categories. “Indians will take time to shift to lower-karat gold jewellery,” said Sachin Jain, CEO, WGC India.

Gold demand shows a clear divergence: investment demand remains strong, while the jewellery segment is under pressure. Industry feedback indicates year-on-year declines in jewellery volumes as higher prices curb consumption. India’s total gold consumption stood at 462.4 tonnes during January–September, WGC data showed.

In value terms, gold imports rose 2% year-to-date to $55 billion, but volumes fell by about 20% to ~580 tonnes, underscoring that value growth is price-led rather than volume-driven. Mid- and small-ticket segments—critical to mass demand—remain particularly impacted.

High net-worth individuals have continued buying heavier gold pieces (100–400 grams), attracted by the ongoing price rally, though this has not been sufficient to offset broader volume weakness. Price volatility is also constraining discretionary and everyday jewellery purchases.

Retail performance reflects this split: large and mid-sized jewellers are reporting relatively healthier sales supported by higher ticket sizes and wedding-led purchases, while small and standalone jewellers face mounting pressure.

Meanwhile, investment-focused buying—especially bars and coins—continues to gain traction. Gold imports for investment surged to 340 tonnes between July and October, up from 204 tonnes between January and June, with even entry-level consumers opting for coins amid the sustained price rally.

source: World Gold Council