The council notes that global gold-backed exchange-traded funds (ETFs) witnessed a broad-based revival, with investors from across the world adding significantly to their holdings
While the record gold prices impacted affordability due to a sharp rise, the World Gold Council (WGC) stated that the share of investment demand in India’s total gold consumption is expected to rise in the current year as the surge in prices will attract investors looking to diversify portfolios.
In its report titled ‘Gold Demand Trends Q1 2025,’ the WGC highlighted that the gold jewellery demand in India fell by 25 per cent on a year-on-year (YoY) basis in the January to March quarter to 71.4 tonnes, as record gold prices dictated global trends. On the other hand, the investment demand marked a seven per cent YoY surge in the quarter to reach 46.7 tonne.
The council noted that global gold-backed exchange-traded funds (ETFs) witnessed a broad-based revival, with investors from across the world adding significantly to their holdings. This has been replicated in investment interest for gold bars and coins, with very few markets witnessing a decline in holdings.
“Gold investment sentiment remains positive in India. The quarter’s strong bar and coin demand, coupled with inflows into gold ETFs and the reluctance of Indians to sell their existing gold, is indicative of continued healthy investment demand,” the Council added in its report.
Consumers are expected to buy smaller or more lightweight pieces or hold back on purchases altogether in the hope that prices may dip and offer a more affordable buying opportunity. WGC noted that the record price level did not encourage a rise in recycling, reflecting the relative strength of the Indian economy, with little need for distress selling. Instead, more buyers opted to trade in old jewellery for new; by the end of the quarter.
The council stated that amid broader financial market turmoil and uncertainty, gold’s role as a store of value is becoming more pronounced, and this is reflected in consumer behaviour as buyers shift from consumption-driven purchases to wealth preservation.
