Investment demand for gold in India overtook jewellery consumption for the first time ever in the March quarter of 2026, as consumers deferred their jewellery purchases due to volatile prices and opted instead to invest in instruments such as gold exchange traded funds.
According to the World Gold Council’s demand trends for Q1, investment demand surged 54 per cent on-year to 82 tonnes, surpassing jewellery demand, which declined 19 per cent to 66 tonnes during the quarter. The fall in the stock markets and the unusual volatility in equities saw investors turning to gold, pumping in more money whenever gold prices declined.
This shift was driven by a sharp rise in domestic gold prices, which climbed 81 per cent on-year to record levels, denting affordability in the jewellery segment while boosting gold’s appeal as a safe-haven investment.
Overall, gold demand in India rose 10 per cent to 151 tonnes in Q1 2026, while in value terms it nearly doubled to a record ₹2.27 lakh crore, reflecting the impact of elevated prices.
Investment demand was led by record inflows into gold ETFs, rising nearly six-fold to ₹30,000 crore in value and 3 times in volume to 20 tons, in addition to strong buying of bars and coins, which accounted for 62 tonnes, nearly matching jewellery volumes.
In contrast jewellery demand was down 19 per cent to 66 tonne (82 tonne) but increased 47 per cent to ₹99,920 crore (₹68,050 crore) in value terms as prices turned volatile and hit record highs in the March quarter.
The WGC has estimated full year demand to be in the range of 650-750 tonnes against 768 tonnes registered in 2026, with investment demand to remain a key driver of India’s gold market in the near term, supported by macroeconomic uncertainty, volatile equity markets and continued global price strength.
The yellow metal prices zoomed 81 per cent to ₹1.51 lakh per 10 gram against ₹83,375 logged last year. With high prices, recycled gold quantum increased 19 per cent at 31 tonnes (26 tonnes).
Despite high prices, gold imports increased 39 per cent to 196 tonnes (141 tonnes) even as prices rallied 82 per cent to $4,873 ($2680) an ounce.
Sachin Jain, Regional CEO, India, World Gold Council, said the domestic gold market in March quarter reflects a continued divergence between volume trend and value growth, shaped by record-high prices and evolving consumer preferences.
Elevated prices and affordability constraints continued to weigh on jewellery demand, particularly in price-sensitive segments, he added.
Investment demand emerged as a key driver of overall growth reflecting investors’ confidence in gold as a strategic asset, supported by heightened global uncertainties and its role as an effective hedge against inflation and market volatility, he added.
While elevated prices may act as a near-term headwind for jewellery demand, the summer wedding season and regional festivals are expected to provide support, building on the momentum seen during Akshaya Tritiya, he added.
Globally, gold demand was down 9 per cent to 1,196 tonnes (1,316 tonnes) with central bank purchases increasing 3 per cent to 244 tonnes (237 tonnes).
Published on April 29, 2026