Gold Rush 2026: India's Bar, Coin & ETF Demand to Hit Record Highs

The report suggests that equities may remain subdued and less attractive due to high valuations, potential tariffs, and foreign outflows. The report highlights that rampant investment interest in India recently produced two consecutive quarters of demand exceeding 90 tonnes for the first time since 2013. Annual demand also reached its highest level since that year, resulting in a record investment value of USD 32 billion.

"The depreciating rupee throughout much of 2024 amplified the rise in the gold price, further fuelling momentum buying. Demand was strengthened by an apparent shift among some investment-motivated jewellery consumers towards lower-margin bars and coins," the report noted.

The rise in gold ETF buying remained a notable feature of the year, supported by new product listings designed to capture nascent demand.

Digital gold purchases also grew steadily, with transaction values increasing almost three-fold. The report notes that market feedback indicates an expanding investor base served by a broad range of providers, which accounts for this growth. It also mentions that the move by India's pension regulator to permit National Pension System funds to invest in gold and silver ETFs may further underpin interest.

While festival and wedding buying boosted jewellery demand on a quarterly basis, a sharp year-on-year drop followed record gold prices. In value terms, however, a record USD 19 billion was spent on gold jewellery in the final quarter, bringing the annual total to an unprecedented USD 49 billion. Consumers in India typically operate on fixed budgets, which acts as a brake on the quantity of gold they can purchase during price rallies.

The report also observes that 14k jewellery gained some traction among younger demographics. "While 14k jewellery gained some traction - particularly among the younger demographic in in northern urban centres - swathes of the country remained reluctant to accept lower carat jewellery as it dilutes a key reason for holding it: long-term capital preservation," the report noted.

- ANI