Gold demand across India registered a clear deceleration during the second quarter spanning April to June 2026. According to the latest report published by the World Gold Council (WGC), aggregate gold consumption in the country declined by 6 percent year-on-year to 131.4 tonnes. In the corresponding April-to-June period of 2025, total gold purchases in India had reached 139.7 tonnes. A combination of historic highs in retail gold prices, recent hikes in import custom duties, and an unseasonal lull in major cultural and wedding events created strong headwinds for retail buyers.
Total Expenditure Surges 50 Percent to Rs 1.98 Lakh Crore Despite Lower Volumes
Although high prices constrained the physical weight of gold bought by retail consumers, the total monetary valuation of gold acquisitions reached unprecedented heights. Data released in the report indicates that Indian buyers spent approximately Rs 1.98 lakh crore on gold during the April-June 2026 quarter. This reflects a substantial surge of nearly 50 percent compared to the overall financial expenditure incurred during the same quarter of the previous year. The divergence highlights how elevated market valuations compelled households and investors to deploy significantly larger capital reserves even while securing lower physical volumes of the metal.
Jewellery Demand Plunges 15 Percent Amid Off-Season and Policy Factors
The consumer jewellery segment witnessed the most severe contraction among all gold categories during the three-month period. Demand for gold jewellery slumped by 15 percent year-on-year to settle at 75.1 tonnes. Industry analysts attribute this drop partly to seasonal patterns, as the second quarter typically lacks key auspicious wedding dates and major festival shopping windows. Furthermore, public buying behavior was influenced by Prime Minister Narendra Modi's public call urging citizens to avoid non-essential gold purchases, prompting many discretionary consumers to defer major jewellery shopping until market conditions normalize.
Investment Demand Remains Solid via Bars, Coins, and Gold ETFs
In contrast to the subdued consumer enthusiasm for traditional jewellery, investment-driven demand for gold exhibited steady resilience. Purchases of physical gold bars and coins grew by 9 percent during the April to June quarter. Concurrently, Gold Exchange Traded Funds (ETFs) sustained positive inflows from institutional and retail investors seeking portfolio diversification. Amid ongoing macroeconomic inflation pressures and global financial volatility, Indian investors continue to view gold as a premier safe-haven asset for long-term wealth protection.
Full-Year 2026 Outlook and Potential Seasonal Rebound
Looking ahead at the remainder of the calendar year, the World Gold Council projects India's overall gold demand for 2026 to remain between 650 tonnes and 750 tonnes. Market experts anticipate that if international bullion prices cool down in the coming months or if duty structures are adjusted, consumer demand could experience a robust recovery during the upcoming festival period and winter wedding season.
