India's Gold Paradox: Value Soars 23% to ₹2 Lakh Crore Despite Lower Volumes

The quarter records total demand of 209.4 tonnes, lower by 16 per cent compared to Q3 2024, showing that higher prices lift value while reducing tonnage. Within this, jewellery demand comes in at 117.7 tonnes, down 31 per cent year-on-year, but its value stays unchanged at Rs 1,14,270 crores.

Investment demand uptick as volumes rise 20 per cent to 91.6 tonnes and value jumps 74 per cent to Rs 88,970 crores. The report attributes the value surge to higher average prices during the quarter.

Sachin Jain, Regional CEO, India, World Gold Council, says the quarter "showcased its inherent resilience and the significant impact of evolving price dynamics." He notes that while volumes fall, "this robust growth in value, driven by high average prices, strongly reaffirms gold's enduring appeal as a safe-haven asset." On the investment side, he adds that demand "showed remarkable strength," highlighting a "deepening strategic commitment among Indian consumers to gold as a long-term store of value."

On supply, imports are 194.6 tonnes, down 37 per cent from last year's quarter, and recycling is 21.8 tonnes, a 7 per cent decline. The report observes that these moves suggest households are holding on to gold rather than selling into the market. Prices remain elevated through the quarter, with the average at USD 3,456.5 per ounce and Rs 97,074.9 per 10 grams (excluding import duty and GST), shaping the shift from jewellery to investment-led buying.

Jain says cultural drivers stay important for jewellery even at higher prices, as its value holds steady despite the volume drop. "This indicates that despite higher prices, gold's intrinsic cultural significance continues to drive purchases, with consumers adapting to the new price levels," he says. Looking ahead to the festive and wedding season, he says retailers are prepared and sentiment is positive, saying "We anticipate robust demand across all categories, from traditional jewellery to investment products, as the market gears up for a vibrant festive and wedding season."

Total demand is about 462.4 tonnes. The Council expects full-year demand between 600 and 700 tonnes, with the outcome leaning toward the higher end of that range, depending on seasonal buying and price movements into year-end.

- ANI