Editor’s Note
A new report highlights a stark divergence in India’s gold market: while soaring prices pushed the total value of jewellery demand to a record high in 2025, the physical volume of gold purchased fell sharply. This underscores how price sensitivity is reshaping consumer behaviour in one of the world’s largest gold markets.
India’s gold jewellery demand by volume fell sharply in 2025 as record prices curbed buying. A World Gold Council (WGC) report said that India’s jewellery consumption fell 24% year‑on‑year (YoY) to 430.5 tonnes in 2025, even as the value of that demand surged to an unprecedented $49 billion.
The WGC noted that “a decline in jewellery demand volumes was entirely expected in the environment of successive record gold price highs.” In India, the impact was particularly stark as the local gold price jumped 74% over the year, forcing households to cut back on fine weight even when sentiment stayed positive.
Festival and wedding purchases supported quarter‑on‑quarter demand in the December quarter, but could not prevent a sharp year‑on‑year drop in tonnage. Indians spent a record $19 billion on gold jewellery in Q4 alone, lifting full‑year jewellery spending to an all‑time high of $49 billion despite the fall in volumes.
High and volatile prices also drove behavioral shifts. The report highlighted that “higher prices prompted a shift toward lower-weight products” and a greater use of trade‑ins, as consumers exchanged old jewellery to manage affordability constraints. While “14k jewellery gained some traction – particularly among the younger demographic in northern urban centres”, large parts of the country “remained reluctant to accept lower carat jewellery as it dilutes a key reason for holding it: long-term capital preservation.”
Retailers responded with aggressive promotions, helping the organised sector “to outperform and boost revenues, despite falling gold volume sales.”
The squeeze on jewellery volumes came even as investment demand in India soared, underlining a shift from adornment to pure asset buying. Bar and coin demand jumped 17% to 280.4 tonnes in 2025, taking investment demand to its highest level since 2013 and to a record value of 32 billion US dollars.
The WGC underlined that India’s experience mirrors a broader global pattern. Worldwide, annual jewellery consumption volumes dropped to a five‑year low of 1,542 tonnes in 2025, even as consumers “spent a larger share of wallet on gold” and pushed global jewellery demand in value terms to a record $172 billion.
Looking ahead, the Council warned that “jewellery weakness is likely to persist” in 2026 if the high‑price environment continues, though it expects jewellery spending to “remain healthy” in value terms. For India, the report suggests that the country’s “stronger outlook should support demand more consistently than in China,” but also makes clear that price will remain the key brake on volumes so long as gold trades near record highs.