India’s festive gold demand set to decline on record prices

Gold jewelry sales in India are set to drop during the upcoming festival season, as record bullion prices push buyers toward less costly alternatives in one of the world’s largest markets. Demand for ornaments is likely to drop by as much as 27% from a year ago in volume terms during the three-week buying period, according to Surendra Mehta, national secretary at the India Bullion and Jewellers Association. Consumers, especially in big cities, are postponing spending due to high costs, he said. Gold is a traditional gift for weddings and special occasions in India, as well as a favored investment. But at a time of year when demand for jewelry is typically strong — the buying season kicks off with the nine-day Navratri festival in September and goes through to Diwali in October — bullion prices are up almost 50% compared to the same festive period last year. Peak season Gold outlets across the country are typically open until midnight during the festival of Dhanteras, which marks the start of Diwali festivities and is a favored time to purchase gold and silver. Jewelry accounts for about 70% of India’s total bullion consumption and for local sellers, revenue for the entire year depends heavily on these few weeks. This season local prices are hovering above 100,000 rupees ($1,128) per 10 grams, or one lakh rupees in the Indian numbering system, discouraging consumers, who generally allocate a fixed budget. Many end up buying lighter pieces than what they would have desired. Global spot prices have more than doubled in the last two years, hitting an all-time high of $3,791.10 per ounce this week. Demand has been under pressure for much of the year. India bought 17% less jewelry between April and June than a year earlier, with total purchases of the precious metal seen dropping in 2025 to the lowest level in five years, according to a World Gold Council report in July. “Most of the demand now is for lightweight or more affordable pieces,” said Arham Ahmad, a Delhi-based jeweler. People coming to his shop are buying small ornaments, some weighing as little as 2 grams, he said. “Demand for heavier jewelry has been subdued for quite some time.” By Preeti Soni

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India’s festive gold demand set to decline on record prices