India’s Gold Demand Soars 10% in Q1 as ETFs and Bars Outperform Jewelry Sales

India’s gold market witnessed a significant rise in demand, climbing 10% year-on-year to 151 tonnes in the first quarter of 2026, driven primarily by soaring prices. The total demand value nearly doubled, reaching a record ₹2,27,530 crore, highlighting a notable shift in consumer purchasing patterns. Investment demand, encompassing gold bars, coins, and exchange-traded funds (ETFs), surged 54% to 82 tonnes, surpassing jewellery demand for the first time since 2000, with investment constituting 55% of total demand.

The surge in investment demand can be attributed to several global factors, including heightened geopolitical tensions and inflationary pressures, which have bolstered gold’s status as a safe-haven asset. Domestic gold prices experienced an unprecedented 81% rise year-on-year, making affordability a critical concern for consumers, particularly in the jewellery segment, whose demand fell 19% year-on-year. The market has also seen an increase in gold imports to 186 tonnes and a 20% rise in recycled gold supply, indicating ongoing investment interest despite high prices.

In the short term, traders and investors should brace for continued volatility as elevated prices may act as a barrier to jewellery demand, particularly in rural markets where price sensitivity is pronounced. However, the approaching summer wedding season and regional festivals are expected to provide a counterbalancing support to jewellery sales. The World Gold Council projects that full-year demand could range between 650-750 tonnes, reflecting the ongoing duality in consumer behavior—where investment remains robust, countering the weakness in traditional jewellery purchasing.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)