Gold Market Shifts Focus: Jewellery Demand Drops, Investment Picks Up
The way people are buying gold is clearly changing. A recent report by ICRA and ASSOCHAM shows that while jewellery sales are slowing down, more people are turning to gold as an investment.
Jewellery Demand Takes a Hit
With gold prices staying high, many buyers are holding back on jewellery purchases. Globally, jewellery consumption fell by 15% in FY2025 and dropped another 17% in the first half of FY2026 compared to last year.
Investors Move In
At the same time, investment demand has picked up strongly. People are increasingly buying gold bars, coins, and ETFs as a safer option during uncertain times. Demand in this segment jumped 74% in FY2025 and rose by another 60% in H1 FY2026.
Experts say this shift is largely driven by global economic worries and ongoing geopolitical tensions, which are pushing investors towards gold for stability.
Central Banks Add to Demand
Another key factor supporting gold prices is the steady buying by central banks, which continue to add gold to their reserves to safeguard value.
What’s Happening in India?
India is seeing a similar pattern.
Jewellery demand has weakened due to rising prices, falling by around 7% in FY2025 and dropping sharply by 26% in the first half of FY2026. Still, demand hasn’t disappeared - it has simply shifted more towards investment options like bars and coins.
Interestingly, despite this slowdown, India has become the world’s largest gold jewellery consumer, overtaking China.
The reduction in import duty - from 15% to 6% in July 2024 - did offer some relief for buyers. But that didn’t last long, as prices soon climbed again following global trends.
Prices Continue to Climb
Gold prices have been rising steadily both globally and in India.
Globally, prices went up 10% in FY2024, surged 30% in FY2025, and have already risen 46% in the first nine months of FY2026.
In India, the increase has been even sharper - 14% in FY2024, 33% in FY2025, and 52% so far in FY2026. A weaker rupee against the US dollar has added to the rise in domestic prices.
The Big Picture
Gold isn’t losing its shine - it’s just changing roles. While fewer people may be buying jewellery right now, more are seeing gold as a reliable place to park their money during uncertain times.
