India’s Gold Demand Rises 10%: Sharp Surge in Investment Buying, Jewellery Demand Falls!!

India’s gold demand recorded a notable rise in the first quarter of 2026. According to data released by the World Gold Council, the country’s total gold demand increased by 10% to 151 tonnes in Q1 2026. In value terms, total demand nearly doubled to ₹2,275 billion (around $25 billion).

The main driver behind this growth was investment demand for gold. During Q1 2026, gold investment demand surged 54% to 82 tonnes, accounting for 70% of total gold demand. On the other hand, jewellery demand declined by 19%, clearly indicating a major shift in gold-buying patterns in India.

Why did gold investment demand rise sharply?

1. Global tensions and safe-haven demand

Ongoing geopolitical tensions such as the Russia-Ukraine war and US-Iran tensions have pushed investors toward safe-haven assets like gold.

2. Record-high gold prices

Gold prices touched historic highs during the quarter. In India, the average gold price stood at ₹1,51,000 per 10 grams, while during Q1 2026, prices touched an intraday peak of ₹1,70,000 per 10 grams. In the global market, spot gold reached a record $4,370 per ounce.

3. Weak Indian rupee

The Indian rupee weakened against the US dollar, making imported gold more expensive. This further pushed up domestic gold prices and increased investor interest in gold as a hedge.

4. Lack of attractive alternatives in financial markets

Weak stock market performance, inflation concerns, and low interest rate appeal in other financial instruments led many investors to shift towards gold.

5. Import duty and GST impact

India’s import duty and GST on gold have kept domestic prices above global levels. Fears of possible future tax increases may also have encouraged early buying.

6. Inflation concerns

Gold continued to be seen as a reliable hedge against inflation, encouraging investors to increase their allocation to the yellow metal.

Which forms of gold investment saw growth?

- Gold bars and coins: 62.3 tonnes (up 47%)

- Gold ETFs: 19.9 tonnes (up 197%)

- Digital gold: Around 3.3 tonnes (nearly 4 times higher)

In particular, digital gold purchases through UPI-based platforms saw a strong jump, showing that tech-enabled gold investment is gaining momentum among Indian consumers.

First time since 2000!!

A major highlight of Q1 2026 is that investment demand for gold has overtaken jewellery demand for the first time since 2000. While investment demand accounted for 70% of total gold demand, jewellery demand fell to a historic low share.

What do experts say?

According to experts from the World Gold Council,

“High gold prices, geopolitical uncertainty, and the lack of compelling investment alternatives in local financial markets are likely to keep gold investment demand strong in India.”

It is estimated that India’s total gold demand for the full year 2026 may remain in the range of 650 to 750 tonnes. However, jewellery demand could remain under pressure due to inflation and weaker household purchasing power, especially if monsoon-related concerns affect rural income.

Key Highlights:

- India’s total gold demand rose 10% to 151 tonnes in Q1 2026

- Total value of demand reached ₹2,275 billion

- Gold investment demand surged 54% to 82 tonnes

- Jewellery demand fell 19%

- Gold ETF investment jumped 197%

- Digital gold purchases saw rapid growth

- For the first time since 2000, investment demand surpassed jewellery demand

Experts believe this trend signals a major structural shift in India’s gold market, with investment demand now playing a much bigger role than traditional jewellery buying.