National News

Retail Gold Sales Drop 25% Amid Rising Prices, Lightweight Jewelry in Demand

Published

12 months ago

March 20, 2025

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A 4% rise in gold prices in March has led to a significant 25% decline in retail gold sales at jewelers and a 60% drop in Zaveri Bazaar. Indian families with upcoming weddings are feeling the pinch of higher gold prices, turning to lighter, lower-carat jewelry to meet bridal jewelry demands. Despite this, demand is expected to pick up during Akshay Tritiya in April, though lightweight jewelry remains the preferred choice.

Gold prices saw a near-4% increase in the first half of March, bringing down retail sales by 25% compared to the same period last year. Zaveri Bazaar, a hub where retail jewellers buy bullion and jewelry in bulk, saw a 60% drop in sales.

Senco Gold & Diamonds, Joy Alukkas, PNG Jewellers, Mamraj Musaddilal Jewellers, and senior executives from the India Bullion & Jewellers Association mentioned that Indian families, especially those with weddings planned for the upcoming season, are stressed by the escalating prices. As a result, they are opting for lightweight jewelry, as high prices make it difficult to stick to the traditional gold jewelry budgets.

Suvankar Sen, the chief of Senco Gold, shared that sales of small-ticket gold jewelry in the ₹30,000 – ₹40,000 price range have dried up. “The high prices are keeping customers away from spending on gold,” he said. On March 18, gold was priced at ₹88,256 per 10 gm in the physical market, with a 3% Goods and Services Tax (GST), pushing the cost to ₹90,903 per 10 gm.

“Those who have weddings in the family are buying lightweight jewellery as they cannot stretch the budget. Demand has dropped by 15% beginning from March and if this rally continues, the recovery in demand may not happen. The next big sales can only happen during Akshay Tritiya, which falls on April 30,” said the MD of Senco Gold & Diamond.

Despite the rise in prices, the demand has remained sluggish in South India too. “Compared to last March, demand is down by up to 25%. While the high price is a big factor in this demand drop, other things like board exams have slowed down demand as well,” said Baby George, CEO of Joy Alukkas.

Saurabh Gadgil, chairman of PNG Jewellers, also highlighted the shift in preferences. “People are buying lightweight jewellery, and many are exchanging old gold jewellery with new ones. The volumes are getting impacted but value-wise the jewellers are not facing any issue.”

Avinash Gupta, partner at Hyderabad-based Mamraj Musaddilal Jewellers, noted that while demand has softened, it hasn’t reached alarming levels. “Demand will bounce back in April due to weddings and Akshaya Tritiya, but definitely the preference will shift to lightweight and lower caratage jewellery.”

Related Topics:2025 GoldSales nationalnews Retail Gold

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National News

Outstanding gold-backed loans surge by 128% from a year earlier

Published

1 day ago

February 28, 2026

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India’s appetite for borrowing against gold is reshaping the country’s credit landscape. Outstanding gold-backed loans have surged 128% from a year earlier, crossing Rs.4 lakh crore ($48 billion) for the first time, according to data from the Reserve Bank of India. As of Jan. 31, loans secured by gold jewellery stood at Rs.4,00,517 crore, marking one of the fastest expansions in retail credit in recent years.

The boom in gold loans has helped propel overall non-food bank credit growth to 14.4% year-on-year. Personal loans now account for 34.5% of total bank lending, outpacing other segments and underscoring a broader shift toward consumer-driven credit expansion

Gold loans alone contributed roughly 9% of incremental bank credit during the period. Between January 2024 and January 2026, outstanding gold-backed credit rose by nearly Rs.3.1 lakh crore—an increase of about 338% over two years—more than quadrupling the size of the portfolio.

Two factors are driving the surge. First, gold prices have climbed roughly 152% over the past two years, increasing the collateral value of household holdings. Second, regulatory guidance requiring banks to classify loans secured by gold explicitly as gold loans has sharpened reporting and accelerated balance-sheet growth in the segment.

The trend highlights a distinctive feature of India’s financial system: households’ vast stock of physical gold, long viewed primarily as a store of wealth, is increasingly being mobilized as collateral for formal credit.

While personal lending and credit to nonbank financial companies within the services sector continue to expand rapidly, industrial credit remains uneven. Loans to micro, small and medium enterprises are growing steadily, but borrowing by large corporations has stayed relatively muted.

Since March 21, 2025, banks have added Rs.21.8 lakh crore to their non-food loan books, translating into 12% growth for the financial year to date. Yet it is gold—rather than factories or infrastructure—that is emerging as one of the most dynamic engines of India’s current credit cycle.