India's 2026 gold demand seen falling to six-year low on price rise: World Gold Council

India's gold demand is expected to fall to a six-year low in 2026, as elevated prices weigh on jewellery sales and investment demand moderates, the World Gold Council (WGC) said on Tuesday.

The country, the world's biggest gold consumer after China, is grappling with rising living costs in the wake of the Iran war, while a weak monsoon could curtail rural demand for jewellery.

ALSO READ | Indian gold buyers get 'breathing room' from Fed before Diwali, but conditions apply


Jewellery demand fell in the first nine months of the year, which will drag down total demand to around 650 metric tons, the lowest since 2020 when the COVID-19 pandemic forced jewellery shops to close, Sachin Jain, chief executive of the WGC's Indian operations, told Reuters.

Gold demand fell 29% year-on-year to 162.5 metric tons in the September quarter, as jewellery purchases declined 20% and investment demand dropped 40%, Jain said.

ALSO READ | Dip in gold price puts the sparkle back into festive and wedding buying, jewellers see 10-12% rise in Dhanteras sales

Demand is likely to improve in the December quarter as key festivals such as Diwali and the wedding season drive purchases, he said.

The country celebrated Dussehra in October and will celebrate Diwali in early November, when buying gold is considered auspicious.

But high prices and weakness in the rural economy following a poor monsoon are likely to cap demand, the WGC said in a report published on Tuesday.

More than half of India's gold demand comes from rural areas where jewellery is a traditional store of wealth for millions.

The monsoon delivered its lowest rainfall in more than a decade in 2026, curbing agricultural production and reducing farmers' incomes.

India's gold imports fell in the September quarter, partly due to a rise in unofficial inflows after the government raised import duties on the precious metal earlier this year, Jain said.