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India's gold demand declined 29% year-on-year to 162.5 tonnes in the July-September quarter of 2026, as record-high prices, higher import duty and changing consumer buying patterns weighed on jewellery purchases and investment demand, according to the World Gold Council (WGC).
Demand stood at 229.8 tonnes in the corresponding quarter last year. However, in value terms, it rose 3% to ₹2,41,900 crore from ₹2,35,090 crore, reflecting the sharp increase in gold prices.
The average gold price during the quarter stood at $4,262 per troy ounce (₹1,48,891 per 10 grams), compared with $3,457 (₹1,02,287) a year earlier, excluding import duty and GST.
The decline in demand comes amid elevated gold prices and an increase in import duty earlier this year. Prime Minister Narendra Modi's appeal to people to curb gold purchases has also been cited among the factors influencing buying behaviour.
Why is India's gold demand declining?
Jewellery demand, which forms a significant part of India's gold consumption, fell 20% year-on-year to 99.9 tonnes in the September quarter, compared with 125 tonnes a year earlier. In value terms, however, jewellery demand increased 16% to ₹1,48,700 crore.
Sachin Jain, Regional CEO, India, World Gold Council, said elevated prices influenced consumer purchasing behaviour, with buyers opting for more considered purchases and exchange programmes.
He added that a late-quarter pullback in gold prices, along with wedding and festive purchases, supported jewellery demand, particularly in South India.
Investment demand also weakened during the quarter. Bar and coin demand declined 40% to 55 tonnes from 91.6 tonnes a year earlier, while gold exchange-traded fund (ETF) demand fell 50% to 5.3 tonnes from 10.7 tonnes.
The Reserve Bank of India (RBI) made no gold purchases during the quarter, compared with 0.2 tonnes in the July-September quarter of 2025.
Gold recycling also remained subdued, declining 12% year-on-year to 19.2 tonnes. Meanwhile, India's net gold imports fell 46% to 114.1 tonnes from 211.9 tonnes in the corresponding quarter last year.
India's gold demand outlook for 2026
The WGC expects India's full-year gold demand to range between 625 tonnes and 675 tonnes, indicating the possibility of a six-year low.
According to Jain, jewellery demand remained under pressure during the first nine months of the year, although the upcoming festive and wedding season could provide some support in the December quarter.
However, elevated prices and weakness in rural demand could limit the recovery. More than half of India's gold demand comes from rural areas, where jewellery is traditionally considered a store of wealth.
Consumers are also adapting to higher prices by opting for lighter-weight jewellery and exchange-led purchases, Jain said.
How is global gold demand shaping up?
Globally, total gold demand, including over-the-counter (OTC) investment, stood at 1,368.6 tonnes in the July-September quarter, marginally lower than 1,383.2 tonnes a year earlier, according to the WGC.
Investment demand showed a mixed trend. Physically backed gold ETFs recorded inflows of 211.2 tonnes during the quarter, despite higher bond yields, a stronger US dollar and easing geopolitical tensions.
In contrast, global bar and coin demand declined 19% year-on-year to 267.8 tonnes, while jewellery consumption fell 17% to 312.9 tonnes, its weakest third-quarter reading since the data series began in 2000.
Central bank purchases, including reported and estimated buying, increased 42% to 321.2 tonnes, the highest quarterly total since the December quarter of 2024. Poland and China led officially reported purchases.
The WGC has raised its estimate for central bank purchases in 2026 and expects them to at least match the 848 tonnes bought in 2025.
The council also revised its forecast for growth in global gold investment this year to 200 tonnes from 400 tonnes earlier, citing weaker demand for bars and coins, even as ETF inflows exceeded expectations.
Gold prices have also corrected sharply from their January record high of $5,595 an ounce, with the WGC citing higher oil prices and expectations of elevated interest rates amid the Iran war as factors weighing on the metal.
-With agencies inputs
