India’s gold jewellery demand witnessed a sharp slowdown in the first quarter of 2026, as soaring bullion prices reduced affordability and pushed many consumers toward smaller-ticket purchases. According to the World Gold Council, jewellery demand fell 19% year-on-year to 66.1 tonnes, making it one of the weakest first-quarter volume performances seen in decades.
Even with lower volumes, the overall value of jewellery purchases surged significantly. Spending on gold jewellery climbed 47% to ₹99,920 crore, supported by elevated gold prices and continued wedding-related buying across the country.
Consumers adapted quickly to the new pricing environment by changing purchase preferences. Many shifted toward lightweight designs, lower-karat ornaments, and studded jewellery as cost-conscious alternatives. At the same time, premium buyers in higher-income segments continued purchasing heavier pieces, helping cushion the broader decline in demand.
A major trend during the quarter was the strong rise in investment-led gold buying, indicating a clear shift in consumer priorities. Total investment demand jumped to 82 tonnes, rising more than 50% from a year earlier. This included bar and coin demand of 62.3 tonnes, up 34%, while gold ETF demand reached a record 19.9 tonnes.
In value terms, demand growth was even stronger. Spending on bars and coins rose 142% to ₹94,130 crore, while investments in gold ETFs soared 437% to ₹30,000 crore.
Another factor supporting the market was the exchange of old jewellery for new purchases. Industry estimates suggest that around 40% to 60% of retail transactions involved old gold exchanges, helping buyers offset the impact of higher prices.
Sachin Jain, Regional CEO for India at the World Gold Council, said jewellery demand faced notable pressure due to elevated prices and affordability challenges, especially in value-sensitive segments. However, he noted that spending remained resilient as consumers increasingly chose lighter and more value-oriented products.
Retailers, meanwhile, reported a strong quarter in revenue terms. Leading jewellers posted year-on-year growth ranging from 32% to 124%, driven by higher average transaction values and rising interest in plain gold jewellery and coin sales. Expansion plans also remained on track, with brands continuing to open new stores despite supply chain challenges.
Significantly, jewellery’s share of total gold demand dropped to 44% during the quarter, falling behind investment demand and underlining the changing nature of gold consumption in India.
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
