Gold demand in India drops 10% in Q2 as high prices hit jewellery

India’s gold demand in the June quarter fell by 10% from a year ago to 134.9 tonnes, according to the World Gold Council (WGC), as rising price of the yellow metal dampened jewellery purchases.

Leading jewellery retail chains, including Reliance Retail, also flagged a drop in demand.

This has prompted the WGC, the global trade association for the gold industry, to revise downward its 2025 projection for India’s gold demand to 600-700 tonnes – from 700-750 tonnes estimated earlier.


Gold prices have been highly volatile of late due to multiple factors, including US President Donald Trump’s tariff imposition in multiple countries, with the metal crossing a lifetime high of Rs 1 lakh for 10 grams for the first time on April 22. It subsequently came down in the April-June period but stayed in the Rs 90,000 to Rs 1 lakh bracket.

Dinesh Taluja, chief financial officer of Reliance Retail, India's largest retailer, told analysts recently that the substantial increase in gold prices may have increased bill values (for its jewellery business), but the number of bills has come down.

"The business is on steady growth, but obviously there is an impact on the significant increase in gold prices. In volume terms, the demand for gold has gone down (in April-June)," he said.

To be sure, the surge in gold prices has increased value growth by 30% year-on-year to Rs 1,21,800 crore of the gold sold in the country in the June quarter, as per WGC. The demand fall has also reduced gold imports by 34% year-on-year to 102.5 tonnes.

Suvankar Sen, managing director of stock market-listed jewellery chain Senco Gold Ltd., said the drop in gold demand on volume terms for the company in April to June is in line with WGC's report. “But value-wise, it has gone up due to high gold prices," he said.

Sachin Jain, regional CEO for India at WGC, said the high price of gold has boosted its demand on the investment front--there is a 7% year-on-year increase in demand volume reaching 46.1 tonnes. “Such figures underscore a deepening strategic commitment among consumers to gold as a long-term store of value," he said.

The high price of gold has impacted jewellery consumption in the country, with the demand falling by 17% year-on-year to 88.8 tonnes in April-June, as per WGC estimates. Jain said gold recycling remains resilient with a modest 1% year-on-year increase to 23.1 tonnes.

“This stability suggests that even at record price levels, consumers are holding on to their gold, reaffirming its status as a prized asset. With total gold demand from January to June at approximately 253 tonnes, we anticipate full-year demand to range between 600 and 700 tonnes,” he said.

On Thursday, gold closed at Rs 98,414 per 10 gms.