MUMBAI, November 3, 2026 — India gold demand is on course to fall to about 650 metric tonnes this year, its lowest level since the pandemic-hit 2020, as elevated domestic prices weigh on jewellery purchases and investment buying loses momentum. The World Gold Council’s latest assessment points to a market in which households are still spending heavily on the metal, but buying smaller quantities because each gram costs substantially more than it did a year ago.
Total Indian gold demand fell 29% year on year to 162.5 tonnes in the September quarter, according to the World Gold Council’s Q3 2026 report. Jewellery demand declined 20% to about 100 tonnes, while investment demand through bars and coins fell 40% to 55 tonnes. The council’s India research showed that demand recovered from the weaker June quarter, but the improvement was not enough to offset the drop against a particularly strong comparison period in 2025.
The fall in volume has not translated into a comparable decline in spending. The value of Indian gold demand rose 3% year on year in the September quarter to about ₹2.42 trillion, while the average domestic gold price was around 45% higher than a year earlier. The gap between tonnage and value is central to understanding the current market: consumers and investors are allocating large sums to gold, but those budgets are buying less metal.
The World Gold Council’s India research also showed that demand in the first nine months of 2026 was 12% lower than a year earlier at about 444 tonnes, while the value of purchases rose 38%. The figures suggest that high prices have changed the mix and size of purchases rather than removing gold from household and investor portfolios. For jewellers, the challenge is to maintain sales value when customers are choosing lighter pieces, lower-carat products or smaller purchases.
Jewellery remains the largest part of India’s gold market, but the rise in prices has made traditional purchases more difficult for households. The council said Indian jewellery consumption was about 100 tonnes in the third quarter, down 20% from a year earlier. Buyers have increasingly favoured lighter-weight pieces and lower-carat designs, while some have postponed purchases or reduced the quantity bought for weddings and festivals.
The seasonal calendar may provide some support in the final quarter. Diwali and the wedding season typically encourage gold buying, and the World Gold Council expects seasonal demand to improve in Q4. But the council also cautioned that high prices are likely to keep jewellery volumes constrained. A stronger quarter would therefore not necessarily mean a return to the levels recorded in the previous year.
Investment demand has also cooled from the unusually strong levels seen in parts of 2025 and early 2026. Bar and coin purchases fell to 55 tonnes in the September quarter, down 40% year on year, although they increased 9% from the June quarter. The council said the decline partly reflected a high comparison base and a moderation in buying as the pace of price gains eased. A nine-percentage-point increase in the import duty in May may also have weighed on demand for physical bullion.
Gold-backed exchange-traded funds continued to attract money. Indian ETF demand increased to 5.3 tonnes in the September quarter from 3.6 tonnes in the previous quarter, according to the council. Holdings rose to about 124 tonnes. The contrast between lower bar-and-coin buying and stronger ETF inflows suggests that some investors are choosing financial products that provide exposure to gold without requiring them to store physical bars or coins.
Digital gold purchases are another growing channel, although they remain smaller than jewellery and traditional bullion. The council estimated gross digital gold purchases at 4.9 tonnes in the September quarter, broadly stable from the previous three months but higher than a year earlier. For the first nine months of 2026, digital gold demand was estimated at 16.3 tonnes, up 76% year on year. The figures point to wider access to small-ticket gold purchases, but digital products have different ownership, custody and regulatory arrangements from physical bullion or exchange-traded funds.
For households, the change in buying patterns is visible in the way jewellery is selected. A buyer working within a fixed budget may choose a lighter chain, a smaller set or a lower-carat item rather than spend more to maintain the same weight. Jewellers can preserve the value of a sale through design and pricing, but lower metal volumes can affect demand for bullion and the economics of manufacturing. The council’s data show that spending can remain firm even when the quantity of gold sold falls.
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The rural economy is an important part of the outlook because more than half of India’s gold demand comes from rural areas, according to Reuters’ reporting of the World Gold Council assessment. Jewellery is often used as a store of wealth by households outside major cities, but purchases depend on agricultural income, local employment and the amount of money available after essential expenses. A weak farm season can therefore affect demand even when the cultural importance of gold remains unchanged.
The 2026 monsoon brought its lowest rainfall in more than a decade, Reuters reported, citing the council’s assessment. Reduced rainfall has affected agricultural production and farmers’ incomes, adding to the pressure from higher living costs. The council’s forecast for the year reflects both the price effect and the risk that households in rural areas will have less money available for discretionary purchases.
Import flows have also shifted. The council’s India report showed that official bullion imports fell sharply in the September quarter, while preliminary estimates pointed to higher unofficial inflows. Reuters reported that the rise in import duty earlier in the year encouraged some gold to enter through unofficial channels. A fall in official imports does not necessarily mean that all physical demand has disappeared; it can also reflect changes in the route through which metal reaches the market, inventory adjustments and the timing of purchases.
That distinction matters for interpreting trade data. Official import figures are an important measure of India’s demand for overseas bullion, but they do not capture every movement of metal into the country. When the price difference between domestic and international markets changes, traders may alter the timing and source of supplies. Unofficial inflows are harder to measure and can complicate estimates of total market demand.
The Reserve Bank of India’s gold holdings were broadly unchanged at about 880.5 tonnes at the end of the September quarter, according to the World Gold Council’s India report. The council estimated that RBI purchases in the first nine months of 2026 were only 0.3 tonnes, compared with 4 tonnes in the same period last year. That indicates a quieter period of official accumulation, although the share of gold in total reserves can still change as the market price moves and the value of other reserve assets fluctuates.
India’s position also reflects wider global conditions. The World Gold Council said total global gold demand, including over-the-counter transactions, was 1,369 tonnes in the third quarter, down 1% year on year. The value of demand rose 22% to a record $188 billion for the quarter, supported by a high average gold price. For the first nine months, global demand reached 3,881 tonnes, almost matching the record 3,884 tonnes recorded in the same period of 2025.
Central banks were a major source of demand. The council estimated that central banks and other official institutions added a net 321 tonnes to reserves in the third quarter, up 42% from a year earlier and the strongest quarterly total since the end of 2024. Purchases in the first nine months reached 675 tonnes, 6% higher than the same period last year. The council raised its outlook for full-year central-bank buying and expects purchases to at least match the 848 tonnes recorded in 2025.
Physically backed global gold ETFs also returned to inflows after outflows in the previous quarter. They added 211 tonnes in Q3, taking total holdings to a record 4,256 tonnes and generating record quarterly inflows of about $31 billion. The council said the inflows continued despite higher bond yields, a stronger US dollar and easing geopolitical tensions, suggesting that concerns about government finances and inflation remained important for investors.
Retail demand was weaker. Global bar-and-coin purchases fell 19% year on year to 268 tonnes, while jewellery consumption dropped 17% to 313 tonnes, the weakest third quarter in the council’s data series dating back to 2000. The council cut its forecast for growth in global investment demand this year to about 200 tonnes from 400 tonnes previously, citing slower buying of bars and coins. It nevertheless expects central banks to remain significant buyers.
The contrast between central-bank and household demand is important. Official institutions can make purchases as part of long-term reserve diversification, while individual buyers are more directly affected by the price they face at a shop or bullion dealer. A central bank may continue to add gold because it wants to diversify its reserves; a household may delay buying a necklace because the same budget no longer covers the desired weight. The two forms of demand can therefore move in different directions even when the global price is high.
For India, the final quarter will test whether festival and wedding purchases can offset the affordability pressures visible in the first nine months. The council expects seasonal support, but a sustained recovery in tonnage would likely require some combination of more stable prices, stronger household incomes and improved rural demand. A rise in spending alone would not prove that volumes have recovered, because the value of purchases can increase simply because the metal is more expensive.
Jewellers, bullion importers and investors will watch domestic prices, the rupee, import flows and ETF subscriptions for signs of a change in buying behaviour. The council’s data suggest that India remains a large and active gold market, but the composition of demand is shifting. Jewellery volumes are under pressure, physical investment has cooled from last year’s high base, and exchange-traded and digital products are taking a larger role in some investors’ choices.
The forecast of about 650 tonnes for the full year is not a final tally. It is an estimate based on the demand pattern seen so far and the outlook for the final quarter. Diwali and weddings could lift purchases, while high prices and a weaker rural economy could limit the recovery. The next set of demand figures will show whether the seasonal improvement is strong enough to change the annual picture.