New Delhi, 03 November (H.S.): India has traditionally ranked among the world's leading gold-consuming nations, consistently featuring among the top three markets, particularly for gold jewellery. However, soaring prices and high taxes appear to be prompting Indian consumers to cut back on gold purchases. The country witnessed a sharp decline in gold demand during the third quarter of 2026.

According to the latest report by the World Gold Council (WGC), India's total gold demand fell by approximately 29 per cent year-on-year to 162.5 tonnes between July and September, compared with 229.8 tonnes during the corresponding period last year. However, despite the decline in demand in volume terms, the sharp rise in gold prices pushed the value of purchases up by 3 per cent to more than Rs 2.41 lakh crore.

The steep decline in gold purchases is being attributed primarily to exceptionally high prices, substantial import duties and Prime Minister Narendra Modi's appeal to people to purchase gold only when absolutely necessary.

Jewellery, traditionally the strongest segment of India's gold market, also witnessed a significant contraction. Demand for gold jewellery declined by 20 per cent in volume terms to 99.9 tonnes during the July-September quarter, compared with 125 tonnes in the corresponding period last year.

According to the World Gold Council's India office, the exceptionally high cost of jewellery has prompted consumers to opt for lightweight ornaments instead of heavier designs. Many buyers are also choosing to exchange their old jewellery for new pieces rather than making fresh purchases. Meanwhile, demand for gold coins and bars, primarily purchased for investment purposes, also registered a steep decline of 40 per cent.

Sales of gold coins and bars, which stood at 91.6 tonnes during the corresponding quarter last year, fell to just 55 tonnes in the July-September period of 2026. The slowdown has also affected India's net gold imports, which declined by approximately 46 per cent to 114.1 tonnes. During this period, the Reserve Bank of India (RBI) also made no fresh purchases of gold.

Taking note of the subdued pace of gold trading, the World Gold Council has projected that India's total gold demand for the full calendar year 2026 could fall to between 625 and 675 tonnes, potentially marking its lowest level in six years.

More than half of India's gold demand comes from rural areas, where pressure on household incomes is currently limiting the prospects of an immediate recovery in the market.

However, industry experts expect jewellery demand to recover to some extent during the final months of the year, supported by the wedding season and major festivals such as Diwali and Dhanteras. 

In contrast, global gold demand continues to remain robust, driven by substantial purchases by central banks. Countries such as Poland and China are among the leading buyers, as they continue to increase their gold reserves.

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Hindusthan Samachar / Jun Sarkar