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India's Gold Crisis: Why Demand Plunged 16% Amid Price Surge

India's gold market faced a significant downturn in the third quarter of 2025 with overall demand falling by 16%. The sharp price increase of 46% made jewellery purchases less affordable for many consumers. Interestingly, investment demand for gold actually grew by 20% as buyers shifted from ornaments to coins and bars. Analysts expect a recovery in the December quarter following improved footfall during the festive season.

Key Points: India Gold Demand Falls 16% in Q3 2025 as Prices Rally

  • Jewellery demand plunged 31% by volume as high prices deterred buyers
  • Investment demand for coins and bars increased 20% despite price surge
  • Gold prices excluding taxes jumped 46% to Rs 97,075 per 10 grams
  • Imports fell 34% to 195 tonnes as consumer sentiment weakened
2 min read

Gold demand in India drops 16 pc in Q3 2025 due to price rally

India's gold demand drops 16% to 209.4 tonnes in Q3 2025 as prices surge 46%, with jewellery demand falling 31% while investment demand rises 20%.

"Gold prices traded volatile with mild gains as the US Fed's rate cut failed to bring major cheer - Jateen Trivedi, LKP Securities"

New Delhi, Oct 30

Gold demand in India fell 16 per cent year-on-year to 209.4 tonnes in the July-September quarter due to a sharp rise in prices that pushed up value by 23 per cent, World Gold Council data showed on Thursday.

Jewellery demand fell 31 per cent by volume during the quarter, while investment demand for coins and bars increased by 20 per cent, the data said.

The price of 24-carat gold (1 gram) was at Rs 11,962 on Thursday, up from 11,935 the previous day, according to data published by the India Bullion and Jewellers Association (IBJA).

In value terms, jewellery spending remained nearly flat at Rs 1.14 lakh crore, while demand for gold investments surged 74 per cent to Rs 88,970 crore.

Gold prices, excluding import duty and GST, increased sharply by 46 per cent to Rs 97,075 per 10 grams in the September quarter, against Rs 66,614 recorded in Q3 2024. This surge impacted consumer sentiment and reduced imports by 34 per cent, down to 195 tonnes from 308 tonnes.

"Gold prices traded volatile with mild gains as the US Fed's rate cut failed to bring major cheer, being largely on expected lines. However, sentiment in bullion remained supportive after US President Donald Trump hinted at allowing nuclear weapons testing amid other nations pushing nuclear tests," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

Gold is expected to remain volatile within a range of Rs 1,18,000 to Rs 1,24,500 in the near term, he added.

Analysts forecast that jewellery demand is projected to recover in the December quarter following a strong Dhanteras and Diwali period, as footfall went up around 15 per cent.

- IANS

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Reader Comments

R
Rohit P
Smart move by people shifting to coins and bars. Jewellery has too much making charges and wastage. Pure gold investment makes more sense in current market conditions. The 74% surge in investment value shows Indians are still bullish on gold!
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Sarah B
As someone who recently got married, I can confirm the struggle! We had to postpone buying my wedding jewellery because of these crazy prices. Hope the Diwali season brings some relief to consumers. 🪙
A
Arjun K
The government needs to reconsider the import duties and GST on gold. At nearly Rs 12,000 per gram, it's becoming unaffordable for middle-class families who consider gold as both investment and cultural necessity.
M
Meera T
My father always says "Sona sona hi hota hai" but even he's waiting for prices to stabilize before buying. Good to see investment demand increasing though - shows people understand the long-term value. ✨
D
David E
Interesting data! The shift from jewellery to pure investment forms shows changing consumer behavior. With digital gold and gold ETFs becoming popular, traditional jewellery buying might never be the same again.

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