India’s Gold Jewellery Demand Surges as Prices Stabilize and Festive Orders Increase, Reports WGC.
Recent developments in India’s gold market indicate an early revival following a month-long slowdown characterized by seasonal demand fluctuations and policy measures aimed at moderating gold consumption. According to insights from the World Gold Council (WGC), consumer purchasing behavior has improved, particularly in the jewellery segment. Although overall demand remains below typical levels, a resurgence in jewellery buying, driven by wedding preparations and upcoming festive seasons, appears to be fostering positive sentiment in the market. Retailers have responded with promotional strategies—such as discounts and flexible payment options—designed to enhance consumer engagement and drive sales.
Moreover, the trend of exchanging old gold jewellery for new purchases has gained traction, significantly bolstered by a mid-May increase in import duties. Reports indicate that exchange volumes have risen by 10-20%, with old gold exchanges accounting for up to 70% of jewellery sales in certain cases. This suggests a shift in consumer behavior toward utilizing existing gold holdings to finance new purchases rather than outright investment in new metals. Consequently, the WGC observes a dynamic landscape where the mix of stable prices and preparations for festive buying is likely to support jewellery demand over the upcoming months.
From a financial performance perspective, major listed jewellery retailers reported impressive quarterly revenue gains, with year-on-year growth figures in the high 30-60% range for the April–June period. Factors contributing to this growth included regional festivals and the summer wedding season. Notably, both plain and studded jewellery segments experienced double-digit sales increases, supported by aggressive marketing campaigns and the strategic expansion of retail footprints across the country. This proactive approach underlines a strong industry confidence in the medium-term outlook of jewellery demand, emphasizing the resilience of the sector despite challenges.
In addition to the physical jewellery market, India’s gold ETFs rebounded in June, contrasting with global outflow trends. Net inflows were recorded at INR34.4 billion (approximately US$356 million), the highest since February, while total holdings rose by 2.2 tonnes. This uptick signifies investor optimism amid price corrections, with further inflows expected in early July. Digital gold transaction volumes also reached a three-month peak, underlining a resurgence in investor interest in this segment. As transaction values increased both in local currency and volume, it reflects a robust resilience in the digital gold market, suggesting continued investor engagement in the context of shifting demand dynamics. Overall, the convergence of these factors positions the gold market for potentially favorable conditions in the short to medium term.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)