India’s gold demand fell 6 per cent year-on-year (YoY) to 131.4 tonnes in the second quarter of 2026 as high prices hampered jewellery sales, even the total value of demand increased by 50 per cent to a record Rs 1.98 lakh crore, as per World Gold Council (WGC) report.
While investment demand for bars and coins remained reasonably resilient despite continued economic and geopolitical uncertainty, the decline in volumes was mostly caused by reduced demand for jewellery.
The value of purchases reached the greatest level for the quarter as a result of the steep increase in gold prices, offsetting the drop in physical demand.
According to the report, many customers delayed buying jewellery throughout the quarter due to high domestic gold prices. The cost of purchasing gold also increased due to higher import levies and the 3 per cent Goods and Services Tax (GST), which further reduced retail demand.
India’s net gold imports dropped 23 per cent YoY to 98.1 tonnes during the quarter, the lowest level since the pandemic-affected September 2020 quarter.
The council cautioned that a rise in gold smuggling has resulted from the government’s decision to increase the import fee on gold to 15 per cent in May, which has increased the price difference between legitimate and unofficial channels.
The report noted that investment interest in the precious metal remained strong despite a decline in the demand for jewellery due to customers’ persistent perception of gold as a safe-haven asset in the face of market turbulence and geopolitical concerns.
It added that if prices stabilise, demand may increase in the second part of the year, encouraging customers who postponed purchases to buy them again.
In recent market updates, the council has also underlined that when domestic prices began to decline from their peak and orders for the holiday season steadily increased, the demand for jewelry began to show indications of recovery.