The third quarter of 2025 witnessed an unprecedented 31% year-on-year decline in India’s demand for gold jewellery. The surge in record-high gold prices in the country negatively affected consumer behaviour and jewellery consumption, as the majority opted not to buy. Further, gold investment demand in India spiked during the quarter, confirming that consumers prefer the precious metal for long-term value rather than ornamental purposes.
Decline in Jewellery Demand
Gold jewellery demand was also sharply down to 117.7 tonnes, from 171.6 tonnes a year ago, a 31% drop in the Q3 2025, WGC said. This was driven by skyrocketing prices, which significantly reduced consumers’ purchasing power. As a result, they resorted to buying jewellery of lighter weight and lower karat. However, in terms of overall market value, jewellery sales were almost flat at around ₹1.14 lakh crore, as buyers adjusted to new record price levels. The demand for the metal was pressured by seasonality factors, as the market was concerned about the September performance, which also coincided with the Shradh period, considered inauspicious for buying precious items.
Surge in Gold Investment Demand
However, gold investment demand increased by 20% in volume to 91.6 tonnes and by 74% in value to ₹88,970 crore from ₹51,080 crore a year earlier. The country’s consumers continue to view gold as a safe asset amid current geopolitical instability and financial uncertainty, investing in bars and coins. Therefore, the situation demonstrates a commitment to gold as a long-term asset for preserving value, despite the high gold price.
Overall Gold Consumption and Price Impact
India’s gold use generally dropped by 16% to 209.4 tonnes in Q3 2025, from 248.3 tonnes one year prior. Even as the aggregate gold requirement, measured in value, expanded by 23% to ₹2,03,240 crore, mirroring the sharp rise in gold prices, the average gold price in India was ₹97,075 per 10 grams, a 46% increase from ₹66,614 one year earlier. Worldwide gold pricing at the corresponding time was $3,456 per ounce, up from $2,474 per ounce.
Market Outlook and Festive Demand
The significant downturn in jewellery demand did not deter hope that the critical festive and wedding season would support sales. Additionally, the first-sale trends showed a substantial increase in sales during October’s Diwali festival. Analysts expect a rebound in jewellery demand during the December quarter, supported by robust festive sales and a more substantial consumer footfall. However, prices remain high, and investment demand is stuck in a rut.
Summary
- Gold jewellery demand in India fell 31% YoY to 117.7 tonnes in Q3 2025 due to record-high prices.
- Jewellery value remained stable at ₹1.14 lakh crore as consumers adapted to higher prices.
- Investment demand rose 20% in volume and 74% in value, reflecting gold’s appeal as a safe asset.
- Overall gold consumption declined 16% to 209.4 tonnes, but total value rose 23% to ₹2,03,240 crore.
- The average gold price surged 46% to around ₹97,075 per 10 grams.
- Festive season sales showed early signs of improvement, but the price surge constrained jewellery buying.
This dual trend of falling jewellery demand amid soaring prices, alongside rising investment demand, highlights a significant shift in India’s gold market behaviour in 2025, shaped by economic uncertainty and evolving consumer preferences.