India’s Gold Demand Projected to Decline in 2026 as Jewelry Sales Dwindle Outweighing Investment Gains

India’s gold demand is anticipated to decrease in 2026, with projections suggesting consumption could range between 600 and 700 metric tonnes, compared to 710.9 tonnes in 2025, according to the World Gold Council (WGC). This decline follows an 11% drop in demand last year, heavily influenced by surging gold prices that are expected to dampen jewellery sales significantly, despite a noted increase in investment buying.

The primary catalyst driving this shift in demand stems from the volatility of gold prices, which surged by 76.5% in 2025. Rising prices have exceeded consumer budgets, causing jewellery buyers to become more hesitant. Additionally, with the Indian stock market’s lackluster performance, investors are gravitating towards gold as an alternative, evidenced by a 283% increase in inflows into gold exchange-traded funds (ETFs) last year. Investment demand for gold has soared to its highest levels since 2013, now constituting approximately 40% of India’s total gold consumption—a notable increase from the typical quarter-share.

In the short term, traders and investors can expect continued price volatility as the dynamics of supply and demand evolve. The WGC emphasizes a gradual shift towards pure investment demand, which is likely to support sales of gold bars and coins, while jewellery consumption remains suppressed. As rising gold prices historically prompt increased selling of scrap supplies, the 19% decline in scrap availability in 2025 indicates that many consumers are holding onto their assets in anticipation of further price increases. This trend could create a complex landscape for market players, balancing investment attractiveness against consumer sentiment in an inflationary environment.

Source: Market Source

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