Indians may get PM Modi's gold message this festive season, with a twist

India’s love for gold may have to make room for some restraint this festive season. Prime Minister Narendra Modi on September 1 urged people to buy the yellow metal only when necessary, a message that could carry some weight with consumers.

Against the backdrop of the West Asia war, Modi had made a similar appeal in May, urging Indians to refrain from gold purchases for a year, citing the extensive use of foreign exchange on them.

Festive gold sales could fall 10–12% after the Prime Minister’s latest appeal, Surendra Mehta, National Secretary of India Bullion & Jewellers Association (IBJA), told ET Online.


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According to Mehta, as a "big influencer," the Prime Minister's appeal is bound to sway consumer sentiment. “And if domestic demand softens to that extent, India's gold imports are likely to trace a matching 10% to 12% decline.”

September is typically a pre-festive planning month for Indians, with consumers holding back cash ahead of the main buying season in October and November. Navratri, Dhanteras and the peak wedding season are expected to drive the next leg of purchases, making the coming weeks crucial for gauging how much of Modi's appeal translates into actual buying restraint.

Gold prices have jumped nearly 39% year-over-year, climbing from around ₹11,100 per gram for 24k gold last September to hovering near ₹15,500 today. Analysts expect market sentiment to stay jittery in the coming weeks, driven by the US Federal Reserve’s upcoming rate decision, fluctuating crude prices, dollar movements, and ongoing geopolitical tensions.

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Lighter grams, Higher bills

Compared to last year, gold jewellery demand this festive season is expected to be softer in volume terms, even as overall spending remains resilient, according to Himank Sharma, Director at Crisil Ratings.

Rising prices combined with higher customs duty continue to stretch consumer budgets. As a result, Crisil Ratings expects organised gold retailers to see a 13% to 15% drop in sales volumes in FY27, building on an 8% contraction last year.

However, India’s affinity for gold during weddings and festivals remains strong; it’s the buying strategy that is shifting. To keep budgets under control, consumers are turning to lower-carat options and old-gold exchanges. Consequently, while shoppers may walk away with fewer grams than last year, their overall bill will stay elevated due to the sharp jump in gold prices.

At the same time, organised jewelers are likely to outshine unorganised players. Driven by brand trust, transparent hallmarking, and aggressive expansion into smaller cities, organised retail’s market share is projected to climb to 50% by FY28, up from 38% in FY25, as per Crisil. So while total volume across the industry takes a hit this festive season, big retail brands are set to capture a bigger piece of the pie.

Echoing a similar opinion, Mehta said that small jewellers are likely to feel the impact more than large retailers, as bigger chains have established customer bases and greater ability to use schemes, influencers and celebrity campaigns to drive sales.

Retailers remain optimistic

Industry checks by ET Online across leading jewellery retailers point to a clear festive-season trend: higher sales in rupee terms, but lower volumes as consumers buy lighter pieces and smaller quantities.

Senco Gold & Diamonds, that recently partnered with digital gold savings and investment platform Gullak, expects festive-season revenue to rise 20% to 25% year on year, helped by elevated gold prices, said Suvankar Sen, the company’s Managing Director and CEO. But the growth in value is likely to mask a decline in the quantity of gold sold, he added.

"People will likely buy lighter-weight jewellery or smaller quantities to stay within their budget," Sen said.

Demand has already started recovering after a subdued May and June. It picked up from mid-July with the end of the inauspicious period and the start of the wedding season, and gained further momentum through August.

Mangesh Chauhan, Managing Director of Sky Gold & Diamonds, also expects the buying environment to improve following the recent stabilisation in gold prices.

"With retailers opening new stores and several large players accelerating expansion, we expect an improvement in both consumer sales and B2B demand compared with last year," Chauhan said.

For large retailers, the festive season is therefore less about the amount of gold consumers buy and more about how they stretch their budgets.

Joy Alukkas, Chairman and Managing Director of Joyalukkas Group, said high prices are prompting customers to rethink their purchases, but have not weakened the underlying demand for jewellery during weddings and festivals.

"Weddings and festivals in India are occasions when people definitely buy jewellery irrespective of the price; they're occasions people plan for," Alukkas told ET Online. "What's changed is how they shop. We're seeing customers gravitate toward lightweight pieces and versatile designs that offer more flexibility for the money."

"There's definitely some deferred demand making its way back from customers who sat on the sidelines while prices were volatile," Alukkas added. "Demand isn't disappearing—it's just getting smarter."

Old is gold

If high gold prices are making shoppers think twice about buying new jewellery, old gold is offering them a way around it.

Old gold exchange is becoming an increasingly important purchase enabler. At KISNA, one in five customers has opted for the exchange route, reflecting how consumers are unlocking the value of jewellery they already own to upgrade to contemporary designs, Parag Shah, CEO of KISNA Diamond & Gold Jewellery, told ET Online.

The trend could gather pace as festive, wedding and gifting demand converge over the coming months. "We expect healthy buying momentum to continue, supported by consumers seeking greater choice across designs, occasions and price points," Shah said.

The exchange route is already accounting for a significant share of business at some retailers. Around 45% to 50% of Senco Gold & Diamonds' recent business has come through gold exchange, rather than fresh purchases, said Sen.

For consumers, it means putting existing household gold back to work instead of spending entirely afresh. The trend also supports Modi's call to curb gold purchases and ease pressure on the current account deficit.

India is the second-largest consumer of gold after China. According to government data, gold imports in FY26 surged 24% to a record $71.9 billion, even as import volumes fell to 721 tonnes. Although the increase was largely driven by soaring gold prices, a higher import bill may put pressure on the economy.

Small jewellers may face pressure

For smaller jewellers too, the festive season may be a case of making more from less.

Festive 2026 is likely to be better than last year in value, but softer in volume, a gap that could become the new normal as high gold prices push consumers towards lighter purchases, said Nitin Gupta of Delhi-based Swastik Jewels.

At Swastik Jewels, value growth is expected to be in the 15% to 23% range even as the amount of gold sold, or grammage, declines.

He said, “Footfalls are up, but ticket size is managed — people are buying the same budget, less weight.”

Investment options

When it comes to investment options, India’s relationship with the yellow metal is splitting into two clear pathways: emotional consumption and strategic wealth-building.

According to Alukkas, consumers aren't abandoning traditional jewellery for bars and coins; rather, they are becoming far more discerning with their budgets. While pure investors may lean toward coins, jewellery remains the undisputed choice for weddings, festivals, and personal expression.

The real shift lies in consumer awareness; buyers are asking sharper questions about design, weight, and overall value, driving a strong surge in lightweight jewelry.

This dual dynamic is reshaping the retail market. Sunil Katke, Head of Commodities Retail Business at Kotak Securities Ltd., said that while the cultural connection to gold jewellery remains unshakable for major family occasions, pure investors are growing increasingly sophisticated.

Rather than defaulting to physical metal, buyers are evaluating whether they simply need exposure to gold prices. Consequently, interest in bars, coins, ETFs and digital gold is also rising.