India's gold demand to fall in 2026 as jewellery slump off sets investment rise

India's gold demand is likely to fall in 2026 following a drop of 11% last year, as a surge in prices dampens jewellery sales and offsets an uptick in investment buying, the World Gold Council (WGC) said on Thursday.

Demand for gold could stand between 600 metric tons and 700 metric tons, compared to 710.9 tons last year, which was the lowest in five years, Sachin Jain, chief executive of the WGC's Indian operations, told Reuters.

Jewellery buyers prefer stable prices of gold, but the volatile rising prices of recent months have far outstripped consumer budgets, Jain said.

"Inflow into exchange-traded funds(ETFs) will continue to grow," he said. "The stock market hasn't performed very well in 2025, so investors are looking for better returns from gold."

Inflows into gold ETFs jumped 283% in 2025 from a year earlier to a record 429.6 billion rupees ($4.67 billion).

Domestic gold prices MAUc1 surged 76.5% in 2025, while India's benchmark Nifty 50 .NSEI has risen 10.5% in 2025.

Jewellery demand in 2025 fell 24% from a year earlier to 430.5 metric tons, its lowest in nearly three decades except for 2020, when the COVID-19 pandemic distorted figures, the WGC said in a report published on Thursday.

By contrast, investment demand rose 17% in 2025 to 280.4 tons, its highest since 2013, the WGC said. Investment demand accounted for a record roughly 40% of India's total gold consumption in 2025, up from a usual share of about a quarter.

"Equities may stay subdued and less attractive amid high valuations, tariffs, and foreign outflows," the WGC said. "A gradual shift from jewellery to pure investment demand should continue to support bars and coins."

Higher gold prices have historically spurred Indians to sell jewellery and coins, in a category called scrap supplies.

In 2025, however, such scrap supplies fell 19% from a year earlier to 92.7 tonnes, as expectations of further price gains persisted despite bullion hitting fresh record highs almost weekly, the WGC said.

-Rajendra Jadhav/Reuters