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Gold Jewellery Demand Plunges 17% as Prices Soar; Investment Demand Surges

Global gold jewellery consumption fell sharply by 17% year-on-year in the first half of FY2026, pressured by persistently high prices. Conversely, investment demand for gold bars, coins, and ETFs surged by 60% in the same period as investors sought safe-haven assets amid economic uncertainty. India emerged as the world's largest gold jewellery consumer in FY2025, but its demand also contracted significantly due to high domestic prices. The report notes that strong investment demand and supportive sectoral trends are expected to underpin medium-term growth despite near-term jewellery weakness.

Key Points: Gold Jewellery Demand Falls, Investment in Bars & ETFs Rises

  • Jewellery demand down 17% in H1 FY26
  • Investment demand up 60% for bars/coins/ETFs
  • India is world's top jewellery consumer but demand fell 26%
  • Central bank purchases support prices
  • High prices & economic uncertainty drive shift
3 min read

Global jewellery demand falls 17% in H1FY26 as high prices bite, but bars, coins, ETFs see sharp rise: Report

Global gold jewellery consumption fell 17% in H1 FY26 due to high prices, while investment demand for bars, coins & ETFs surged 60%, report finds.

"Global gold jewellery consumption... declined sharply. However, demand for investment products such as bars, coins and exchange-traded funds (ETFs) surged - ICRA-Assocham Report"

New Delhi, March 25

Global gold jewellery consumption declined sharply in the first half of FY2026 due to elevated prices, while investment demand for gold witnessed a strong surge amid economic uncertainty, according to a joint report by ICRA and Assocham.

The report stated that global gold jewellery consumption, in volume terms, declined by 15 per cent in FY2025 and further by 17 per cent year-on-year in H1 FY2026, primarily due to high gold prices.

However, the trend in the gold market has shifted significantly towards investment-led demand. Demand for gold bars, coins and exchange-traded funds (ETFs) surged by 74 per cent in FY2025 and further by 60 per cent in H1 FY2026 on a year-on-year basis.

It stated, "Global gold jewellery consumption, in volume terms, declined sharply.... However, demand for investment products such as bars, coins and exchange-traded funds (ETFs) surged".

The report highlighted that persistent economic uncertainty and geopolitical tensions have driven investors towards gold as a safe-haven asset. Additionally, central banks have continued significant gold purchases in recent years to diversify reserves and preserve value, providing strong support to global gold prices.

It noted that rising gold prices have dampened consumer demand for jewellery globally, but strong investment demand has offset the decline to some extent.

In India, the gold sector is undergoing structural changes driven by greater formalisation, regulatory support, technological adoption and deeper financial integration.

Despite a contraction in demand, India emerged as the world's largest gold jewellery consumer in FY2025, surpassing China. However, jewellery demand in India declined by around 7 per cent during FY2025 and saw a sharper fall of around 26 per cent year-on-year in H1 FY2026 due to persistently high prices.

The report added that this decline in jewellery demand was partly offset by strong investment demand for gold bars and coins.

A reduction in customs duty on gold imports to 6 per cent from 15 per cent in July 2024 provided temporary relief and improved consumer sentiment. However, domestic prices soon rebounded in line with global trends.

Global gold prices have witnessed a sharp rally in recent years, rising by 10 per cent in FY2024, 30 per cent in FY2025, and by 46 per cent in the first nine months of FY2026 on a year-on-year basis.

Domestic gold prices have increased at an even faster pace, rising by 14 per cent in FY2024, 33 per cent in FY2025 and 52 per cent in 9M FY2026, largely due to the depreciation of the Indian rupee against the US dollar.

So the report stated that while high prices may continue to impact jewellery demand in the near term, strong investment demand, growth in organised retail, expansion of gold loans and supportive policy measures are expected to support the medium-term growth of India's gold sector.

- ANI

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Reader Comments

A
Arjun K
Smart move by investors. In these uncertain times with global tensions and inflation, gold bars and ETFs are a much safer bet than the stock market. I shifted some of my portfolio to gold ETFs last year and it's been a good decision.
R
Rohit P
Interesting that India is still the top consumer even with a 26% drop! Shows our cultural attachment to gold is very strong. But the shift from jewellery to investment is clear. People are thinking of gold as an asset first, ornament second.
S
Sarah B
The duty cut to 6% was a welcome step, but it's disappointing that the benefit didn't last for consumers. The rupee depreciation is a major factor hurting us. Need more stable policies to protect domestic buyers from these wild global swings.
V
Vikram M
Gold loans becoming more popular is a positive. It helps people unlock the value of their existing jewellery for emergencies or business without having to sell it. This formalisation of the sector is good for the economy.
K
Karthik V
While I understand the investment angle, it's a bit sad to see jewellery demand fall so sharply. Gold is deeply woven into our festivals and weddings. Hopefully, the organised retail and tech adoption mentioned can make buying more efficient and slightly more affordable.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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