Gold demand gains traction as market enters key festive & wedding season

Kolkata: Seasonal gold demand is gaining traction as the market enters the key festive and wedding period with the recent decline in gold prices has provided some support to demand, according to a World Gold Council report. Manufacturers are reporting healthy order flows as retailers replenish inventories to meet this seasonal demand, while industry feedback points to improving in-store footfall.

Alongside increased marketing and promotional activity, jewellers have focused on fresh designs and lighter weight pieces, which offer greater wearability.

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Old-gold exchange remains an important feature of the market, with jewellers offering additional incentives to encourage consumers to trade existing holdings for new purchases; this also contributes to domestic gold supply.

Bar and coin demand, meanwhile, has reportedly moderated as price momentum has eased, tempering some of the investment-related buying seen during the earlier price rally.

WGC said that listed jewellery retailers reported strong double-digit revenue growth in the range of 20-30% y/y in the July-September quarter, suggestive of resilient consumer demand despite elevated and volatile gold prices during the quarter and a less favourable festive calendar. The performance was particularly noteworthy as key festivals that supported sales in the same period last year shifted to the October-December quarter this year.

Growth was driven by a combination of strong same-store performance and continued network expansion. Retailers maintained an active pace of expansion, with the largest players adding 42 stores during the quarter. Same-store sales growth of around 20% suggests that growth was not only driven by the opening of new retail outlets but also by healthy demand across existing stores. Retailers are also focusing on tighter inventory control to help manage working capital pressure caused by the elevated gold price.

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Demand during the quarter benefitted from wedding-related buying, festive purchases, growing consumer preference for lightweight jewellery, brand-led promotional activity and strong growth in e-commerce channels. The growth profile indicates that value growth continued to outpace volume growth. Buyer growth remained in the mid-single digits, while average ticket sizes increased by double digits, reflecting the combined impact of higher gold prices and ongoing premiumisation. Old-gold exchange transactions remained an important source of demand, rising by more than 10% y/y and accounting for over 50% of sales for some retailers.

In contrast, investment-led coin demand reportedly moderated from a strong base.

Management commentary is positive for the coming two quarters, supported by festive demand and the peak wedding season. Sales are expected to benefit from new store openings as well as marketing and promotional campaigns.

Indian gold ETFs saw stronger net inflows in September, broadly in line with the global trend. According to data from the Association of Mutual Funds in India (AMFI), net inflows rose to Rs 44.5bn (US$466.2mn), the highest in seven months. Nearly 3 tonnes was added to holdings during the month, taking cumulative holding to 124 tonnes. The pickup in inflows suggest that investors viewed the September price decline as an opportunity to add gold as a strategic asset and portfolio diversifier. Inflows continued into October, with an estimated INR17.22bn (US$ 181mn) of net inflows during the first half of the month, equivalent to around 1.2t.

Despite the higher inflows, cumulative assets under management (AUM) declined by 2.5% m/m to INR1,863bn (US$19.5bn), largely reflecting the 7% fall in domestic gold prices during the month. Gold ETFs accounted for 2.25% of overall mutual fund AUM, marginally below 2.27% in January’26.

Investor participation also picked up. Gold ETFs added 140,231 new folios (accounts) during September, a marked increase from around 4,000 in August, taking the total number of folios to 12.68mn. This increase suggests that the price pullback encouraged broader investor participation, highlighting continued interest in gold as a long-term portfolio allocation.