India gold demand 2026 is expected to decline as a slump in jewellery buying outweighs rising investment demand, the World Gold Council (WGC) said on Thursday. Elevated and volatile gold prices have dampened consumer appetite for jewellery, even as investors increasingly turn to gold amid weak equity market performance.
According to the WGC, India’s total gold demand is likely to range between 600 tonnes and 700 tonnes in 2026, down from 710.9 tonnes in 2025 the lowest level in five years. Sachin Jain, chief executive officer of the WGC’s India operations, said sharp price increases have pushed gold beyond the budgets of many jewellery buyers.
“Jewellery consumers prefer price stability, but recent volatility and sharp rises have made purchases difficult”. He added that investment demand, particularly through exchange-traded funds (ETFs), is expected to remain strong.
Investment demand rises as equities underperform
Investment inflows into gold ETFs surged 283% in 2025 from the previous year, reaching a record 429.6 billion rupees ($4.67 billion). The jump came as domestic gold prices soared 76.5% in 2025, while India’s benchmark Nifty 50 index gained a comparatively modest 10.5%.
“The stock market hasn’t performed very well, so investors are looking at gold for better returns,” Jain said.
The WGC noted that investment demand rose 17% in 2025 to 280.4 tonnes, the highest level since 2013. Investment accounted for nearly 40% of India’s total gold consumption, up from a long-term average of around 25%.
Jewellery demand hits multi-decade low
In contrast, jewellery demand fell sharply. The WGC reported a 24% year-on-year decline in jewellery consumption in 2025 to 430.5 tonnes, the lowest level in nearly three decades, excluding the pandemic-hit year of 2020.
“Equities may remain subdued amid high valuations, tariffs, and foreign capital outflows,” the WGC said. “This environment supports a gradual shift from jewellery consumption toward bars, coins, and other investment products.”
Scrap supply also declines despite record prices
Historically, high gold prices have encouraged Indians to sell old jewellery and coins, boosting scrap supply. However, scrap supply bucked the trend in 2025, falling 19% year-on-year to 92.7 tonnes. The WGC attributed this to expectations of further price gains, even as bullion prices touched fresh record highs almost every week.