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India's gold demand is expected to decline to around 650 metric tons in 2026, marking a six-year low, as elevated prices weigh on jewellery purchases and investment demand moderates, according to the World Gold Council (WGC). Demand fell 29% year-on-year to 162.5 tons in the September quarter, with jewellery consumption declining 20% and investment demand dropping 40%. Weak rural incomes following the weakest monsoon in more than a decade and rising living costs are adding pressure. Although Diwali and the wedding season could support December-quarter purchases, high prices are likely to limit the recovery.

Key Highlights

• India's gold demand is projected at 650 tons in 2026, the lowest level since 2020.
• September-quarter gold demand declined 29% year-on-year to 162.5 metric tons.
• Jewellery demand dropped 20%, while investment demand declined 40% during the September quarter.
• Weak monsoon rainfall and lower agricultural incomes are expected to restrict rural jewellery purchases.
• Diwali and the wedding season may support December-quarter demand, although elevated gold prices could limit recovery.

India's gold demand is expected to decline to around 650 metric tons in 2026, marking a six-year low, as elevated prices weigh on jewellery purchases and investment demand moderates, according to the World Gold Council (WGC). The projected demand would be the lowest since 2020, when the COVID-19 pandemic forced jewellery shops to shut. Gold demand declined 29% year-on-year to 162.5 metric tons in the September quarter, reflecting weaker consumer purchases amid high prices.

Jewellery demand fell 20% during the September quarter, while investment demand dropped 40%, according to Sachin Jain, chief executive of the WGC's Indian operations. Elevated gold prices, rising living costs following the Iran war and economic uncertainty have affected consumers' purchasing capacity. Additionally, a weak monsoon has compounded the pressure on rural demand, which accounts for more than half of India's overall gold consumption.

The monsoon recorded its lowest rainfall in more than a decade in 2026, curbing agricultural production and reducing farmers' incomes. Since jewellery traditionally serves as a store of wealth for millions of rural households, weaker agricultural earnings could further restrict purchases. The WGC also highlighted that India's gold imports declined during the September quarter, partly reflecting increased unofficial inflows following the government's earlier hike in import duties on the precious metal.

However, demand could improve in the December quarter as Diwali celebrations and the wedding season traditionally encourage gold purchases. Dussehra was celebrated in October, while Diwali in early November is considered an auspicious occasion for buying gold. Nevertheless, high prices and weakness in the rural economy are likely to limit the recovery.

India's gold demand faces continued pressure from affordability concerns and rural weakness, while festive and wedding purchases may offer limited support towards year-end.

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